The pandemic raised concerns over the resilience of global supply chains, but Singapore can work around it by focusing on and developing the regional market, experts said following the Budget speech by Deputy Prime Minister Heng Swee Keat yesterday.
This would allow its businesses to leverage the strengths of the various countries within Asean, and let the Republic be valuable to the regional supply chain, noted a three-man panel discussion on the Budget jointly hosted by The Straits Times and Money FM 89.3.
Mr Heng, who is also Coordinating Minister for Economic Policies and Minister for Finance, told Parliament that while the pandemic has seen collaboration across industries and countries in areas such as vaccine development, it has also "accentuated a US-China-centric technology race into a global race for technological superiority and heightened concerns over supply chain resilience".
He said Singapore businesses must transform and digitalise to plug themselves into the flow of goods and capital.
During the panel discussion, Mr Harvey Koenig, tax partner at KPMG, said this year's Budget has placed an emphasis on developing the regional Asean market.
"For example, Singapore may have the strength in advanced manufacturing, but needs other manufacturing hubs within Asean, for example, to supply component parts. So, that is where the value of a common market will come in," he said.
The panel also included UOB senior economist Alvin Liew and The Straits Times' associate editor Ven Sreenivasan.
Noting this year's expected deficit of $11 billion, Mr Koenig said: "Of course, if you compare it to last year's Budget, it seems small in comparison. But if you look at it in comparison to other Budgets we have had in the past, this probably is the second-largest budget deficit in Singapore's history, as far as I can recall."
Mr Sreenivasan noted that this year's Budget targeted segments and sectors that really need help.
"If you are running a karaoke pub, you are not going to get anything. But if you are in aviation, tourism and all, you will get something. So, it is very targeted, very tapered, very sensible," he said.
Mr Liew said that the Budget appears to be "as good as you can get", given the various issues that have to be addressed, with the limited resources that are available.
"You have to spend resources due to the pandemic, but, at the same time, you can't really ignore that you still have a future to plan out," he said.
He added that issuing bonds under the proposed Significant Infrastructure Government Loan Act will be a more equitable way to fund long-term projects, instead of including them within the national Budget itself.
Fabian Koh
