Inderjit Singh
Singapore
“You do not want our monetary policy easing to offset some of these as it will result in an inefficient allocation of resources. I think our SMEs will also be similarly affected by higher import costs.”
“Thus, SPRING can become something like a Municipal Service Office (MSO) for SMEs. SPRING has already set up an outreach mechanism through the SME Centres. This structure should stay to be the outreach arm.”
“I want to thank the Minister of State for agreeing to the suggestion of the first- and one-stop agency. We have higher expectations, so, I hope we can make it work. But my question on REITs was not answered.”
“She worried about the eroded sense of belonging that she and her friends felt and their view that Page: 24 the Government was more interested in luring foreigners than bringing Singaporeans home. She said that friends and relatives asked if she planned to stay in Australia after her graduation. In 2013, she was unsure of her answer.”
“I recently read that, in Malaysia, the EPF holders are paid 6% for their savings for a number of years, and this is much higher than the return we are paying to our CPF holders.”
“I believe Minister of State Mr Teo Ser Luck mentioned just now the company formation rate of about 14,000. I would like to ask are we monitoring the rate of companies folding up. I have heard recently that the rate has also increased, especially in some sectors that are very dependent on rental.”
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“Sir, our industries, in particular the small and medium enterprises, and the manufacturing sector, basically our factories, are facing difficulties in hiring sufficient workers. While we have depended heavily on foreign workers in certain sectors of our economy, this solution comes at a cost, both in monetary as well as social cost terms. If we compare ourselves with Japan and the USA, the percentage of females in the workforce in Singapore is substantially lower than these two countries, while at the same time we are hearing from many Singaporeans that they are finding it difficult to make ends meet, and have to rely on both the husband and the wife working in order to earn enough for the family unit. Sir, the question is: why are we not able to motivate more housewives and even some retirees to join the workforce? I feel that the added cost like the need for child care facilities, transport cost and other costs result in the net income of a part-time worker's take-home pay being unattractive. This group of potential workers is much needed for the continued growth of our economy if we do not want to bring in too many foreign workers. I would like to ask the Minister if he would consider the following proposals in order to make the back-to-work programme a success. First, to cut down the employee's CPF contribution for part-time workers so that the take-home pay is higher and becomes an inducement for them to go back to work. Perhaps at least a 50% cut would be attractive.”
“Sir, many of our local companies, especially the small and medium enterprises, were expecting some special help from the Government during this tough and rough period of our economy and, in particular, in the manufacturing and supporting industries. The signal that this important sector of our economy is getting is that they are being discouraged from continuing to do manufacturing in Singapore while the Government is focusing on large foreign multinationals. While there are a number of schemes already available to help local companies and SMEs, there are a number of problems that have yet to be resolved to aid such companies. I would like to ask the Minister the following questions: Why is it very difficult for local companies, especially the SMEs, to process and get their applications for the various incentive schemes to be approved? It appears that the playing field is not level for local companies, especially SMEs, as compared to MNCs, which get their applications easily approved. Can the Ministry further simplify the procedures to make it easier to process applications for such companies? Can SMEs be allowed a special budget from the Skills Development Fund for staff training to upgrade their skill level and the value-added content of their industry? These include claims for management and the executives of these companies. Can the Government allocate a special soft loan fund from which SMEs can tap into to help them go regional? Could the Ministry also relook at the automation grants available for local companies to increase the quantum to make it more attractive for them to apply?”
“The model that exists for us is called Samatec, which exists in the USA, and Samatec has been very useful in allowing the American industry to regain the lead in a number of areas which they lost to the Japanese in the 1980s. 4.30 pm”
“Sir, for the past 30 years, our economy has been fuelled mainly by foreign multi-national companies. During this period, many of our local professionals and workers have picked up useful skills that in effect allow a 100% local team to fully manage a company or an operation in Singapore and also in the region. Our people have the capability to start up and grow companies, especially in the high technology area which includes electronics, semiconductors, information technology and others. Unfortunately, unlike the other newly industrialised economies or tigers like Hong Kong, Taiwan and South Korea, in Singapore, we do not have a significant number of entrepreneurs, especially technopreneurs. If you look at Taiwan, there are many such technopreneurs who have contributed very valuably to the growth of their industries and economy. The real issue is that we have not developed a conducive environment where technopreneurs are encouraged to come forward to embark on start-ups. Nor do we have a strong group of technology investors who are willing to take on high-risk projects. I would like to ask the Minister if he would consider setting up a unit that would help develop and create an environment for technopreneurs and entrepreneurs to mushroom and perhaps assist such people with funds to start up companies. I also would like to ask the Minister if the Ministry would consider setting up a consortium of local-based multi-nationals who can develop strategies and technologies that can help them launch our local companies in the international arena. This should be funded partly by the Government and partly by the private sector.”
“Thirdly, can the Minister make it easier to remit overseas income for companies and individuals so that they are not motivated to keep their incomes outside Singapore? Finally, for individuals, to grant special tax rebates in lieu of the higher cost of education for their children in international schools as they locate themselves in some of these countries.”
“Sir, over the last five years, the Government has done much to promote the regionalisation of our businesses. It is a very timely drive by the Government, given the rapidly opening Asian markets like China, Vietnam, Laos and others. It was also a realisation that we could not in the long term depend solely on the local based economy. Without regionalisation, Singapore's economy will eventually shrink, especially as multi-nationals relocate outside Singapore to more competitive countries. As the momentum for regionalisation picks up and goes into higher gear, many of our local companies need a little more help from the Government. As such, many industry players who have regionalised or are planning to do so were a little disappointed that the Minister for Finance did not provide additional new incentives in this year's Budget. I would like to ask the Ministry whether more help and incentives can be provided to further encourage regionalisation in the following areas. Can the Government share some of the costs related to regionalisation, like the cost of relocation of staff, training of staff to prepare them to go overseas and the cost of higher insurance in the host countries? Secondly, whenever the Singapore Government-linked companies take on regional projects, can they consciously and, as a rule, bring along with them smaller local companies to handle the smaller sub-projects that they may undertake? This, I believe, is what the French and Korean governments practise. The GLCs have the means and the Government support to take on big and riskier projects in the region, while the smaller local companies cannot take advantage of the opportunities that easily.”
“Will the Minister review the Skills Development Fund guideline to allow more workers to qualify than the current group of workers? Can the Government also stop any Government charges and levy increases for the next two years so that the businesses can ride through the tough period that they are seeing right now?”
“Sir, as I have mentioned in my speech in the Budget debate, many of us were surprised that the Minister for Finance did not give any concessions to the manufacturing sector which contributes about 25% of our GDP. For our local companies, especially the SMEs, the situation is even worse because they have nowhere to go even if we encourage them to regionalise. They still need a home base from where technology can be developed and transferred. They must be able to keep their home base competitive before they can regionalise. As the competition around us grows stronger, if you are not careful, the recovery from a downcycle we are seeing now may be long drawn and may be different from other cyclical effects that we have seen in the past. I therefore would like to ask the Minister to consider implementing more measures that will help our manufacturing sector and other businesses pull through the next one to two years until full recovery can be achieved. Sir, may I ask the Minister the following questions? Can land and property costs be further reduced by allowing JTC to reduce rentals for the next two years by a larger quantum than what has already been announced? How can we improve the efficiency of land use? Are there any steps taken by the Ministry that can help in this area? Also, can the Government implement a strategic non-pricing policy where many companies can qualify for special rates when starting up new facilities in Singapore? I would like to ask if there is any policy in place at this moment. Given the good surpluses in our budget, can the Minister allow a one-off 10% tax rebate, just like what we have given to individuals, for companies?”
“Sir, the strengthening of the Singapore dollar has compounded the cost of doing business in Singapore, particularly the overall labour cost when we convert it to foreign currencies, especially in US dollar terms. Many multinational companies operating in Singapore have been under tremendous pressure from their HQs to pull out operations from Singapore and relocate to lower cost countries because they are continuing to see the strengthening of the Singapore dollar. When we compare our labour cost to that of our neighbours as well as other countries around the world, Singapore continues to look unattractive. Our problem is compounded by the shortage of workers, especially in the manufacturing sector. In the last few days, there has been a general devaluation of currencies of our neighbouring countries while the impact on the Singapore dollar has been relatively small. This will further reduce the competitiveness of Singapore when we convert the total cost of doing business into US dollar terms. I would like to ask the Minister whether he is considering any measures with respect to the strength of the Singapore dollar that will soften or reverse the past trend that we have seen.”
“Sir, as the Minister rightly identified in his Budget speech, the prices of industrial land have escalated sharply in the past few years in line with the steep increases in residential properties. Office and industrial land rentals in Singapore are among the highest in the world, as many Members have pointed out in this House. Compared to Taiwan, we are almost two to three times as expensive as far as industrial land is concerned. If we compare ourselves to our close neighbours, we are definitely not competitive. The key issue has been that we have failed to control asset price inflation and this, I believe, is the root cause of all our competitiveness problems affecting both cost of living as well as cost of doing business in Singapore. We should have learned from similar problems that happened in the USA in the late 1980s where it took them about 3-4 years to get out of the ballooning property prices problem, and from Japan, who are still not out of it after six years. Both of these countries face the consequences of steep asset price inflation. The question for us is whether Singapore, which is land scarce and a much smaller economy than the USA or Japan, can withstand the negative after-effects of asset price inflation. My question for the Minister is whether anything will be done to reverse the effects of the steep price increases. I would also like to ask the Minister whether he would consider implementing measures that would further restrict or control foreign ownership of private properties in Singapore. I believe we can learn from the control measures implemented in Malaysia or Australia, both of which have much more land than Singapore but are still putting in place such controls. Sir, I will now talk about the strength of the Singapore dollar.”
“There are many examples where we could have done better had we allowed market forces to decide on issues with less Government control. One question that many businessmen and industrialists have is whether we can live with a slightly lower surplus. Do we really know what is the optimal level of surplus that is healthy for our economy in the future, especially as we approach developed status? Can we actually release some of our funds so that our local businesses and companies can use these funds to restructure their businesses to ensure that they will survive in the face of tough competition ahead? In conclusion, Sir, the Budget reflects the long term plans of the Government. It also reflects the PAP Government's commitment to continue to share the success of the country with Singaporeans. This is reflected by the huge sums of money set aside in this budget for the HDB upgrading programme, the Medisave Top-up Scheme, increased funds for Medifund and Edusave. Above all, the Government has not forgotten those who will be impacted by the utility rates and other increases, by giving them utility, S&C and rental rebates. Hence, I conclude that, just for a few areas, the Budget announced is almost an all rounded one. It is a pity we fall short of making it one that is all rounded.”
“I therefore feel that we may have to set up a body or organisation specialising in helping the SMEs, just like the various specialised departments in the Economic Development Board that help multinationals do business in Singapore. The SMEs need special help to restructure their businesses until they can ensure long term competitiveness for themselves. We must remember that in order to regionalise, we still need a home base capable of developing the skills and technology to fan out to the other sites in the region that we manage. We therefore cannot neglect the competitiveness of our operations and companies in Singapore. Summary of competitiveness I feel that we may face a different situation from the one we faced in the mid-1980s where Singapore was in a recession during the bottom of the electronics and the semiconductor cycle. At that time the world was also in a similar situation, especially the USA, while this time round it is not. At that time, our neighbours were not on par with us and they had not sufficiently developed their infrastructure to become alternate investment choices for foreign investors for certain types of high technology and high value-added investments. Now, our neighbours have caught up and are providing strong competition and they can take on the same investments that we are targeting. I therefore feel that we may take a much longer time to get out of a down cycle from now on, should we go into a slump in the manufacturing sector. I also hope that the Government will, to a larger extent, allow market forces to rule the business environment and release more control that they have had up to now. Of course, this cannot happen overnight as we have been used to our current system for a long time.”
“I therefore hope the Government will be able to do a lot more in providing attractive incentives that will encourage employers to invest in training and productivity improvement programmes for their workers. (c) Strength of the Singapore dollar Sir, even if our wage increases have been in line with productivity improvements, if the Singapore dollar continues to strengthen against foreign currencies, then in their home currency terms, for the multinationals operating in Singapore, the wage cost and other related social cost of doing businesses in Singapore go up at a much higher rate than real productivity improvements. We therefore cannot just look at wage increases in Singapore dollar terms, but also in foreign currency terms. We may not be able to sustain competitiveness in the long term if our dollar continues to strengthen too fast, as it happened in the past few years. The recent "devaluation" of the other ASEAN currencies will create added pressures for us. I hope the Minister for Finance will consider proactive measures that will moderate any steep changes in the exchange rates in the future. Regionalisation and Small and Medium Enterprises We have to continue to encourage regionalisation among our local companies. However, we must be realistic that many of our local SMEs are not in a position to do it on their own and to take full advantage of Singapore's regionalisation effort nor fully tap the incentives given by the Government. Although there are a number of incentives targeted for the SMEs, they have not been able to take full advantage for various reasons, including a lack of understanding of what is available and how to apply.”
“Control of foreign ownership Although we have some controls in this area, I believe more can be done and one area we need to seriously look at is further restricting foreigners from purchasing private properties in Singapore. If we look around the world, there are many countries with good measures, even countries like Malaysia and Australia, which have abundant land, have more stringent control on foreign ownership of land and property in their countries than we have here. Allow attractive subsidies for new businesses To bring in investment dollars, the Government needs to consider allowing a wider range of businesses which can enjoy the subsidies of land and building rentals. This should be especially encouraged for companies pumping in large amounts of capital dollars in Singapore. I understand we have such a system for a selected group of industries like wafer fabs, but I feel we need to allow more businesses to qualify. Labour availability and cost (a) Availability of Workers Another area which really impacts the efficiency of the manufacturing sector is the availability of the right type of workers with the appropriate skills. We need both skilled as well as semi-skilled workers. Because the manufacturing sector cannot attract enough Singaporeans, there is a need to further open up new sources of workers, especially from the ASEAN countries. (b) Productivity and training of workers In order to remain attractive, we need to ensure the productivity of our workers continues to improve so that we can justify the wage increases. To achieve this, companies need to invest a lot more than what they have been investing in the training of our workers, especially the older workers. However, if they do this, it adds to the total labour cost.”
“The sudden and steep increases in industrial and commercial property prices have caught many businesses too suddenly and they have not been able to restructure or adjust their businesses to become profitable again fast enough. Multinationals may be encouraged to accelerate their relocation to lower cost countries, if the cost of land overshadows other attractive features of the Singapore economy, like the highly skilled and productive workers, good infrastructure support and incentives for companies to invest here. Areas for Government to focus on Sir, given all the problems related to the asset price inflation, I was therefore expecting the Minister for Finance to announce measures that will control any future steep increases in property prices. Although the measures introduced in May 1996 were useful to reduce widespread speculation in the property market, I feel that more needs to be done so that we do not go the way that Japan went some years ago. Singapore being small cannot afford to see the bubble bursting all of a sudden. We therefore need many more measures to curb any future steep increases in property prices. Improve efficiency of land use Some of the suggestions that I have are, first of all, to improve the efficiency of land use. One of the areas, especially in the industrial land use, is that we need to actively look for opportunities where industrial land can be more efficiently used so that the overall cost can be brought down. We need to allow some flexibility as to how the land needs to be developed and consider better plot ratios. Also, there is a possibility of allowing multiple uses for a single piece of land.”
“These are the manufacturing sector and the Small and Medium Enterprises (SMEs). Given that manufacturing contributes to about 25% of the total GDP, I would have thought that the Minister could have provided some help, especially during this period where the manufacturing sector is going through a rough period. On the other hand, the SMEs form a very important part of our economy, employing a relatively large percentage of our workforce and contribute a significant amount to our GDP. They too have been neglected in this Budget. Manufacturing sector Sir, the manufacturing sector has been experiencing sluggish growth and even decline in certain quarters for the last six quarters. Although the electronics and semiconductor industries have been through some cyclical low periods, one of the key issues facing Singapore is its competitiveness as a manufacturing base. This is especially critical since foreign investors now have wide ranging choices as the capabilities and attractiveness of other Asian countries improve. There is a particular threat from our close neighbours who now have the people and infrastructure to manufacture as well as us, at attractive costs, quality and cycle times. I was therefore anticipating some help from the Government to address such competitiveness issues in the two areas of concerns for the manufacturing sector, namely, cost of land and labour. Land cost As the Minister rightly pointed out, the costs of land in Singapore, be it residential, commercial or industrial properties, have risen artificially high in such a short span of the past five years. The Government has failed to control asset price inflation, unlike its good job in controlling consumer price inflation in Singapore.”
“Mr Speaker, Sir, thank you for allowing me to join in the debate on the Budget proposed by the Minister for Finance. Given that this is an interim or half-time Budget, the Minister could have made it a bit more all rounded had he thought about and given concessions so that the issue of the cost of doing business in Singapore could have been addressed. Although we may hear of more comprehensive measures next year, many businesses really need help right now and for some it could have made the difference between surviving or succumbing to the pressures faced. Summary of Budget In summary, the Budget announced by the Minister last week provided good incentives for the financial sector, though it will benefit just a few existing businesses in Singapore. The added incentives for the logistics operations and the siting of satellite operations here also indicate the direction being set by the Government. For all these sectors, I can understand why the impact of the incentives will be felt only by a few big players in their respective fields, and I support the thinking behind it because it is very key that we are able to attract a few of the big names who are the leaders in their fields to locate into Singapore. These big players will form a vital base in Singapore that will stimulate supporting industries. They will bring in the expertise and technology that we lack and we can learn from them. With the support of a group of big international players based in Singapore, we can become an important regional centre for the selected sectors. I believe that the incentives also reflect the growing importance of these sectors as the future components of the overall Singapore economy. I feel that the Minister for Finance has overlooked two very important areas in our economy.”
“If every Singaporean strives to be better than his or her counterpart of our competitors, like our neighbours, I am sure we will succeed. It is of vital importance that our leaders motivate the nation to have a shared vision of what we want to be in the future if we want to succeed. Every Singaporean must participate so that we have one common direction and that is to be the best and to make Singapore our best home. Sir, I support the motion.”
“From 1993 to 1995, it grew by 64% and I believe it is worse than this because many incidents go unreported. On 8th May this year, all the major Malaysian newspapers prominently reported this problem, in response to a Reuters report earlier. This was indeed very shameful for us and could create a negative image for our country in the long term. A prominent Taiwanese industrialist I spoke to recently concluded that the serious crime and gangster problem in his country is the result of a school system where young teenagers started going wayward in their secondary schools where the teachers do not have much authority to discipline them. I strongly feel that our teenage gang problems are also starting in our secondary schools. I have seen many such cases during my meet-the-people sessions and also after speaking to a number of teachers, and I believe this is true. I urge the Education Ministry to spend more time to look into this issue. The Education Ministry's programmes for the next five years are very impressive, but I feel the "software" or the human aspects of school life are not sufficiently addressed. One of the problems I see is that our teachers, just like in Taiwan, do not have enough leeway to discipline their students. And there is a general lack of respect for them in some schools. I worry that the crime problem we are seeing in Taiwan today may become something we may have to deal with in 10-15 years from now. In conclusion, Mr Deputy Speaker, Sir, I hope Singaporeans do realise that we are going to face stiff competition ahead. Singaporeans must develop a strong sense of competition and they must have the fighting spirit to want to do better than their competitors.”
“I am sure many of our local companies, on their own, will not be able to compete effectively but, as a team, we will have a good chance to succeed. This is especially important in our regionalisation drive as we export our expertise. I stated earlier of the disincentives for investors because of the high land cost. I would like to suggest that the Government find ways to reduce industrial land cost, not purely by subsidising it, but rather by looking at how industrial land can be used more efficiently and effectively like improving the plot ratios allowed and also to allow multiple uses in the same site. We may also have to develop a policy of strategic land pricing to offer attractive industrial land prices to attract certain sectors of industries to invest in Singapore, as has been done in Taiwan. We can be sure that our neighbours will use the lure of cheaper land and labour to attract the same investors that we are interested in. In order for Singapore to continue to succeed in this environment of competition, we will need certain success factors like being able to adapt to changes very fast, constant innovation and continued investment in R&D, a hardworking and highly skilled workforce working as a team, and a strong partnership among workers, employers and the Government. Above all, we must have a desire to fight and win. Sir, before I end, I would like to shift my topic away from the issue of competitiveness. I am very concerned about the rising discipline problem among our teenagers. In my opinion, if we do not do anything about it now, it will reach alarming levels in the near future. In a report released by the Police Force on 16th February this year, it was shown that the trend of teen gangs being arrested for gang-related activities grew very steeply.”
“One observation I have of the electronics industry in Taiwan is that there are many technopreneurs who have contributed valuably to the growth of the industry and the economy there. I would like to suggest that the Economic Development Board (EDB) play a more active role in identifying true home grown technopreneurs who have the ideas, but may not have the financial resources to start up the company. Unlike Taiwan, Singapore does not have an aggressive network of cash rich investors who are willing to invest in the high risk/high return technological start-ups. I am hoping that EDB can take on this role until we develop our own network of `technovestors'. The current focus for EDB seems to be in attracting big investors and in helping the already successful local companies through programmes like the Promising Local Enterprise Scheme. In USA, some years ago, the Government facilitated the formation of a consortium of large local companies to enable them to pool their resources together so that they could rebuild their strength and lead in many areas of technology and manufacturing where the Japanese overtook them in the 1980s. This consortium is called SEMATECH. It has been very useful through synergy of efforts, in allowing many American companies to regain their lead in a number of areas. I would like to suggest that we form a similar consortium of local-based multinationals, purely run by the private sector and funded jointly by the Government and the private sector. The objective of this consortium should be to develop strategies and technologies that will allow locally grown multinationals to become major players in the world arena.”
“To help ease the labour shortage in the manufacturing and service sectors, I hope the Government will consider allowing more workers from non-traditional sources to be brought into Singapore. As our economy progresses, we have to engage in higher value-added activities and more high-tech industries. There is an urgent need for us to retrain many of our workers who may not have very much of a formal education. The responsibility of upgrading their skills needs to be shared by the workers, the employers and the Government. As pointed out by the Member for Pasir Ris, Mr Ahmad Magad, some of the older workers may not be sufficiently motivated to upgrade their skills on their own initiative. Instead of disincentives, I would like to propose we offer them some incentives or rewards that would entice them to take on some vital skills that will be important for our targeted industries and the economy of the future. I would like to suggest that NTUC put in some effort to identify the type of workers we will need for the future. They will have to work with the Ministry of Trade and Industry to align as to the type of industries and businesses we are targeting in the long term. Only after this is done, can we identify the type of skills our workers need to have and hence the right type of training programmes that have to be developed. I feel that the BEST and WISE programmes, although useful in the past, are now a little outdated and require revamp in order to remain relevant for the future. In addition to the programmes identified in the Addendum of the Ministry of Trade and Industry, I would like to add a number of suggestions that may help improve our competitiveness.”
“As long as productivity growth remains strong, high wage increases are acceptable. Unfortunately, as foreign investors see it, a strengthening Singapore dollar further amplifies the increases in wages. From 1992 to 1995, in US$ terms, wages increased by around 18% per year, making labour cost a negative factor for new and existing investors. I believe this is one of the main reasons why we lost big investors like Microsoft and Packard Bell to our neighbour. We therefore need to ensure wage rise is in line with productivity improvements and, at the same time, the Government should consider moderating any steep increases in exchange rates to keep labour cost more predictable and affordable. Sir, our workers in Singapore are among the best in the world. This has been shown by many competitiveness reports. However, I was disturbed, though not surprised, to read the recent PERC report on 12th May 1997 where Singapore workers were ranked almost at the bottom (10 out of 12 Asian countries) in the category of loyalty. I am not surprised because there is a trend of job hopping among our younger workers, professionals included. Although I am not suggesting outright legislation to avoid job hopping at this stage, I do feel we may need to introduce some doses of disincentives so that employers are not too heavily burdened with constant hiring and training of workers as a result of job hopping. The fact that our workers are being ranked low in this area in a global report is cause for concern. Worker shortage is another problem and I am glad that the Ministries of Labour and Trade and Industry are aggressively working on programmes at encouraging housewives and retirees to join the workforce.”
“The lesson for Singapore here of course is to have our locally grown multinationals with a high level of technological development who can compete in the world economies. Sir, while we have to be mindful of the external threats that challenge Singapore's competitiveness, we also have to focus on a number of internal threats that, if not checked, could stifle our growth. The first is the cost of doing business in Singapore and in particular the high land and property cost. The steep rise of property prices in the last few years has made us less attractive compared to other Asian countries. In a recent survey, and reported in the February issue of the Singapore Bulletin, Singapore was the 3rd most expensive city in the world in terms of office rentals, behind Tokyo and Hong Kong. London and New York were cheaper than Singapore. While the Government has been very successful in controlling consumer price inflation, asset price inflation was not well controlled which has affected residential, commercial and industrial properties. Collectively, the steep increases of all three types of properties have impacted the cost of living for Singaporeans and also the cost of doing business in Singapore. I strongly believe that the runaway property prices in the past few years did have a negative impact when we tried attracting certain investors into Singapore. I feel that the Government could have intervened a little earlier to avoid the ballooning property prices in which many speculators gained. This, of course, needs to be done carefully to avoid the balloon bursting on us suddenly. The second factor affecting Singapore's competitiveness is the cost of labour. Over the years, real wages have increased.”
“The one area of threat I see for Singapore is a large pool of talented professionals from Malaysia who chose Singapore as a place to work because of certain push factors in their country some time ago. We must not underestimate the latent nationalist feelings that may exist among these professionals. A similar trend happened among the Taiwanese and South Koreans some time ago and 20 years later, they returned to their countries and fueled the tremendous growth of the electronics and semiconductor industries in their countries. If conditions become favourable in our neighbouring countries, we have a potential danger of a reverse brain drain of professionals. We must be constantly aware of this and ensure that Singapore remains an attractive place to work and live in for those who have made it their home. The American economist Paul Krugman created quite a stir recently when he published his article called "The Myth of the Asian Miracle". In it, he concluded that there was nothing spectacular about the booming economies of the Asian Tigers because the governments pumped in a lot of input factors like capital, labour and government spending. He concluded that such growth cannot be sustained without technological and productivity improvements which he said did not really exist in the Asian economies. Although there are many flaws in his argument, I would like to highlight that we may start to see a trend of more `Americanisation' of companies who are starting to believe that, in the long term, it would be more productive to put their investments in their own country. The Member for Bukit Timah, Dr Wang, talked about this yesterday. I believe this is a distinct threat to countries like Singapore who have depended heavily on multinational investments to grow their economies.”
“Sir, creating wealth ultimately means having a strong and growing economy with better paid jobs leading to better standards of living. The Government's goal of 5-7% annual growth into the 21st century is indeed a reasonable target as our economy approaches developed status. I believe the single biggest problem in sustaining a healthy economic growth is the competitiveness of Singapore compared to our fast progressing neighbours. Our competitiveness is being threatened in two ways. There are both external and internal threats. While in the past, we had very strong competition from other NIEs like Taiwan, Korea and Hong Kong, we had no close social ties with them. Wanting to beat the competition was thus relatively easy. But now, we have to compete with our close neighbours and, in particular, Malaysia is like trying to compete and beat a close relative. This is a difficult thing to do, but it has to be done since we are now competing for the same type of investments. When asked to comment on how he thought the Malaysian multimedia super corridor would compete with Singapore's IT plan, Dr Mahathir, the Malaysian Prime Minister, said that Malaysia would do better in attracting more investors because Malaysia is bigger than Singapore in physical size. And from the reactions of the Malaysian leaders recently, I hope Singaporeans realise that our close neighbour is all out to beat us as we compete. We therefore must be mindful of this at all times and have a winning spirit. We have many strengths and a good lead to stay ahead of our competition despite our small size. In addition to the IT drive, our neighbours are also pursuing investments in the high-tech semiconductor industry.”
“Mr Deputy Speaker, Sir, I fully support the motion moved by the Member for Bukit Timah expressing Parliament's thanks to the President for his Speech. In his Speech, the President talked about the fierce competition that Singapore is facing. In my opinion, the challenges facing Singapore today are as pronounced as those faced by the governments immediately after independence. The problems at that time were of infrastructure, national security and those faced by a nation at birth. We are grateful to the founding leaders like Senior Minister Lee Kuan Yew for making Singapore what it is today. Today, we are successful, and managed to put our small island nation in the world stage and progressing well towards being a developed nation. We the younger generation saw success in the country all around, being No. 1 in many areas like our airline, airport and seaport. While this is good for our country, we need to watch for issues that come along with this success and some of these are, first, complacency and taking the success we have for granted, as the Member for Cheng San, Dr Michael Lim, rightly identified yesterday. Second, lack of similar survival instinct among the younger Singaporeans as it existed during my father's generation. Third, the effect of affluence of society and wanting the finer things in life at the expense of wanting to achieve stretched goals. With the many challenges facing Singapore, the Singapore 21 programme is indeed very timely and I am confident, if we implement the programme successfully, Singapore will come out stronger than before. There are a number of issues related to the Singapore 21 programme that I would like to touch on and many Members in this House have also touched on it, and that is the competitiveness of Singapore.”