SINGAPORE - Prime Minister Lee Hsien Loong on Thursday (Oct 1) announced that a new review committee will be set up to examine how Singapore can help workers and businesses adapt in the face of a weaker global economy and leaner workforce.
Called the committee on "The Future Economy", it will be chaired by new Finance Minister Heng Swee Keat. It will be made up of 30 members, including several ministers.
The majority of the committee - 25 out of 30 members - comprises leaders of multinational companies such as Shell and the Boston Consulting Group, as well as local enterprises such as the Timbre Group, ST Engineering, and Sing Lun Holdings.
The practice of setting up such a unit is not new.
In 2001, then-PM Goh Chok Tong created the Economic Review Committee (ERC) - chaired by Mr Lee who was Deputy PM at that time - to review policies and propose appropriate strategies to promote further growth in the Singapore economy.
About eight years later in 2009, PM Lee himself commissioned the Economic Strategies Committee (ESC) - led by then-Finance Minister Tharman Shanmugaratnam - to brainstorm new and creative ways to ensure the economy's long-term growth.
Here's a quick look at the two previous committees and what they proposed.
Economic Strategies Committee
When was it set up: May 2009
What was its goal: To study five broad strategies:
- Exploring new growth areas;
- Anchoring global companies in Singapore while nurturing home-grown enterprises;
- Growing human and knowledge capital;
- Creating high-value jobs for Singaporeans;
- Maximising finite resources such as land and energy
Who was on it: A total of 25 members drawn from the Government, business sector and academia. Then-Finance Minister Tharman Shanmugaratnam chaired the unit.
When did it submit its report: February 2010
- Key performance indicators mooted:
- Achieve a productivity growth of 2-3 per cent per year over the next decade, more than double the 1 per cent rate over the last 10 years
- With that productivity growth in mind, grow the country's gross domestic product (GDP) by 3-5 per cent per year
- Grow workers' incomes
Key recommendations: The ESC set out seven recommended strategies over the next decade, which can be summarised in three broad priorities: boost skills in every job, deepen corporate capabilities to sieze opportunities in Asia, and make Singapore a distinctive global city and an endearing home.
1. Productivity-driven growth
- Raise foreign worker levies so that companies will rely less on cheap foreign labour
- National Productivity Fund to give productivity grants to companies, tax rebates or grants for companies to invest in productivity
- Enhance Workfare to keep older workers in the workforce and encourage low-wage workers to upgrade their skills
2. Global-Asia hub
- Make Singapore a leading consumer business centre
- Keep manufacturing at 20-25 per cent of the economy
- Attract companies here to test urban innovations, such as the Electronic Road Pricing system
3. Diverse mix of companies
- Double number of small and medium-sized enterprises (SMEs) with revenues of over $100 million to 1,000 by 2020
- Encourage mergers and acquisitions among SMEs and cooperation between multinationals and SMEs
- Government and private sector to start a growth fund of up to $1.5 billion to invest in growth-oriented SMEs in next 10 years
4. More innovation
- Spend 3.5 per cent of GDP on R&D by 2015, up from 3 per cent
- "Designed in Singapore" accreditation to emphasise design-driven innovation
- Centres of Innovation in polytechnics to help firms enter new growth areas
5. Smart-energy economy
- Study feasibility of nuclear energy
- Renewable energy to account for 5 per cent of peak demand in 2020
- Price energy to reflect real costs and constraints
6. Better use of land
- Tanjong Pagar to be new waterfront city after 2027
- Create new underground spaces with an underground masterplan and subterranean land rights
- Intensify land use and make land zoning more flexible
7. Global city, endearing home
- Have five world-class institutions or programmes by 2020 in new disciplines such as arts and fashion
- Affordable spaces for arts and design
- Host more high-profile international events
Economic Review Committee
When was it set up: December 2001
What was its goal: Implement immediate measures to deal with uncertainties due to the Asian Financial Crisis, and to put in place longer-term strategies to restructure the economy.
Who was on it: A 20-strong committee, led by then-DPM Lee Hsien Loong and comprising government ministers, union leaders, academics and CEOs
When did it submit its report: February 2003
Key performance indicators mooted:
- Full economic recovery by 2004
- Economic growth of 3-5 per cent every year
- Labour force growth of 1-2 per cent
- Productivity growth of 2-3 per cent
- Real wage growth of 2-3 per cent
1. More immediate proposals to cut costs and stay competitive
- Defer restoration of employers' CPF rate beyond 36 per cent by two years; progressive increase to 40 per cent thereafter;
- Lower salary ceiling for CPF contributions from $6,000 to $5,000;
- Lower employee CPF rate to 16 per cent for those aged between 50 and 55, from 20 per cent
2. Remake Singapore into a global economy in 15 years
- Build a creative and entrepreneurial nation willing to take risks;
- Build a diversified economy powered by the two key sectors of manufacturing and services
- Appoint a minister to champion entrepreneurship
- Establish ministerial committee to lead drive to develop services sector