To prepare for growth in the post-coronavirus years, Singapore needs to produce essential food and medical supplies locally, invest in and adopt energy-efficient technologies, and seek new business opportunities in the growing "green" economy.
These efforts will make the country's economy more resilient and sustainable and, in turn, give it a competitive advantage, said Deputy Prime Minister Heng Swee Keat yesterday.
The building of such economic resilience and sustainability is one of three "priority areas" in Singapore's refreshed economic strategy for a post-Covid-19 world. It was set out in a ministerial statement in Parliament by Mr Heng, who is also Coordinating Minister for Economic Policies and Finance Minister.
Economic resilience, however, is not a new idea for Singapore, he said, noting that the country has achieved resilience through a diversified economy, with multiple engines of growth.
"No one industry accounts for more than 20 per cent of our GDP (gross domestic product), so we do not put all our eggs in one basket."
As a result, Singapore was on a relatively strong footing when the Covid-19 pandemic struck, he said.
It had enough medical supplies and essential goods for its people and healthcare workers because of its national stockpile, which was backed by local production and a diverse network of trading partners, Mr Heng said.
But the pandemic also exposed vulnerabilities. Across the world, there were shortages of essential goods and critical inputs for industrial production as well as a halt in access to workers owing to work stoppages and travel bans.
Demand also ground to a halt in many industries, Mr Heng added.
"We must therefore act now to improve our economic resilience.
"In doing this, we may have to creatively combine the efficiency of having things ready 'just in time' with the resilience of building buffers 'just in case'."
One way to reinforce resilience and grow is to produce essential supplies locally, which are not just for use domestically but can be exported as well, Mr Heng said, citing medical supplies such as masks and test kits.
Another example he gave was food. Singapore has set a "30 by 30" target, which means to produce 30 per cent of its nutritional needs locally by 2030, up from less than 10 per cent today.
The technology used, such as in seeds and alternative proteins, can be exported. "We can grow these capabilities, building on our strengths in research and development and our standing as a trusted hub," Mr Heng added.
An important part of a resilient economy is environmental sustainability, especially for a future that is low carbon and resource constrained, he said.
It is also an opportunity for the green sector to be a growth industry in its own right, he added.
Singapore is transforming its industries to be more sustainable, by continuing to invest in research into energy-and resource-efficient technologies. They will be encouraged to invest in these technologies through incentives from government agencies.
Singapore will also set itself up as a carbon services hub in Asia, with demand for related engineering, legal and consultancy services expected to increase in tandem with efforts to limit growth of carbon emissions, said Mr Heng.
With finance also being an important enabler of green growth, financing solutions and markets in Singapore are being developed to help firms finance their adoption of more sustainable practices.
These moves, taken together, serve a dual purpose, said the Deputy Prime Minister.
"They strengthen our economy so that we can bounce back quickly and better from shocks, while adding to our value proposition as a vital global node in Asia.
"In turn, all these initiatives will create many new opportunities and valuable jobs for our people."