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To better withstand external shocks like Ukraine war, S'pore must 'redouble' economic transformation efforts: Lawrence Wong
Published April 4, 2022
Updated April 5, 2022
SINGAPORE — Singapore needs to redouble its economic restructuring and transformation efforts to help the economy become more resilient to external shocks, said Finance Minister Lawrence Wong on Monday (April 4).
Speaking in Parliament, Mr Wong said that Singapore is now dealing with increases in electricity and fuel prices due to Russia's invasion of Ukraine.
But even without this conflict, Singapore will eventually have to adjust to an increase in energy prices as it seeks to decarbonise the economy.
On the manpower front, Singapore will also continue to face a tight labour market due to its rapidly ageing population.
In short, labour and carbon are permanent, and not temporary, constraints for Singapore’s economy, said Mr Wong.
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“Therefore, we cannot offset these costs perpetually,” said Mr Wong, in delivering a joint ministerial statement with Second Minister for Trade and Industry Tan See Leng on inflation and business costs.“Instead, a more viable approach is to redouble our economic restructuring and transformation efforts, to become more innovative, more productive and more energy efficient.
"These efforts will help our economy become more resilient to external shocks,” said Mr Wong.
It will also provide sustained income growth for Singaporeans with earnings rising faster than inflation. This will help Singapore retain and grow its purchasing power and achieve higher standards of living, he said.
Mr Wong noted how the Covid-19 crisis had “jolted” businesses to digitalise in the last two years.
“In the same way, I hope the current increase in business costs and energy prices will motivate firms to change their mindsets, their processes and their practices,” said Mr Wong.
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He urged businesses to make full use of the various government support schemes to accelerate their restructuring and transformation.This will strengthen businesses’ abilities to withstand shocks and position them well for the future, said Mr Wong.
Delivering his statement, Dr Tan, who is also Manpower Minister, said the Government has in place measures to ensure that the country has adequate fuel supplies, including petroleum.
In the case of food supply, Dr Tan said that essential food products have not been significantly affected by the Ukraine-Russia conflict and the Government will keep a close watch on global supply chains.
It will also ramp up its supplies from alternative sources when required, he added.
Addressing concerns of cost pressures faced by businesses, Dr Tan said that the Government is committed to partnering with Singaporeans to ride through this difficult period.
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"At the same time, we must also be prepared for longer-term trends that may put further upward pressure on prices," he said.The Government has set aside resources to help businesses cope with higher costs.
These include the Small Business Recovery Grant, which provides S$1,000 for every local employee, as well as the Progressive Wage Credit Scheme to support businesses with their manpower costs.
Dr Tan added that the Government will help businesses become more energy efficient.
He said it is studying various options, such as making it easier for businesses to apply for existing grants.
