Singapore must prepare itself to weather a global economy that could be entering an era of uncertainty amid fundamental shifts in investment and trade patterns that render monetary easing ineffective, said Monetary Authority of Singapore managing director Ravi Menon yesterday.
He told a panel discussion at the Milken Institute Asia Summit that to stay competitive in this changing landscape, Singapore will have to keep investing in lifelong learning while governments worldwide must focus on enhancing infrastructure.
Mr Menon noted that the monetary easing policies that central banks have pursued for years are "vastly overrated" in importance and have missed the point of what is ailing the world economy.
"First, investment is weak. In the United States, for instance, the housing and labour markets have recovered, private consumption is chugging along. The only part of the engine not working is corporate and private investment, despite a huge cash pile available.
"Second, for the first time in decades, global trade is growing slower than global income. If trade - the source of global growth and prosperity since the second World War - is now growing slower, are we entering a new era of uncertainty?"
The disruptive trends that Singapore and Asia are facing point to a shift in investment focus away from heavy assets to more agile and knowledge-based solutions, just as IT firms spend less on big data architecture and rely more on cloud technologies, he said.
Industrial production supply chains are also increasingly consolidated and brought onshore, further impacting trade flow and Asian economies that are reliant on manufacturing.
In this turbulent world, Singapore has to work very hard, Mr Menon warned, "like a swan that looks serene and still above the water line but is in fact paddling vigorously beneath".
"The critical component of success is going to be lifelong learning. That's one of the big challenges Singapore is grappling with, because almost everything we learn in schools is going to be outdated in a few years of our working life.
"We need to break this century- old divide between education and work, make it seamless and continuous. One principal area of public investment is to get at this problem."
Asian economies must also continue to build their physical and digital infrastructures to restore confidence for investment and support growth, Mr Menon said.
About 400 corporate executives, officials and investors gathered here for the two-day Asia Summit held at Four Seasons Hotel to discuss challenges and opportunities Asia faces.
Hong Kong property tycoon Ronnie Chan, the chairman of Hang Lung Properties, said he is confident that China has the resources to weather its economic issues, but warned that the rise of terrorism in Asia may prove disruptive.
In a separate session, Yoma Strategic chairman Serge Pun painted a bullish outlook for Myanmar, where his Singapore-listed company has built a sizable portfolio in the property and tourism sectors.
"I have never been so optimistic about Myanmar's future, the stars are aligned and I think we will have five good years going forward... If we'll have problems, they will appear only at the end of the coming five years when the next election looms," he said, adding that the government is committed to building the nation through the rule of law.