SINGAPORE (Sept 19): Against a backdrop of sluggish economic growth, Deputy Prime Minister and Finance Minister Heng Swee Keat is hoping to position Singapore as the global node of Asia, hailing greater regional collaboration to pick up the momentum.
In response to a question at the Milken Institute Asia Summit 2019 on Thursday, Heng spoke about advancements in technology that enabled borders to be broken down and new practises to be changed and reshaped, such as in manufacturing and finance.
At the centre of this change, however, is where he wants to place the city-state.
“We are positioning Singapore to be the global Asia node,” he says, adding that many projections point to Asia being the fastest-growing region in the coming years.
Yet, for now, Singapore is not having an easy time of it. Gross domestic product (GDP) is likely to come in between zero growth and 1% for the full year, according to the Ministry of Trade and Industry.
Already, the MTI had trimmed its growth expectations once this year, in May, when it lowered the upper bound from 3.5%, and forecast growth of 1.5% to 2.5%. The US-China trade war, and the looming British exit from the European Union, has impacted trade-reliant Singapore more drastically than neighbours in the region.
When asked whether Singapore has plans for any expansionary spending in light of a downturn in the economy, Heng says: “We are ready to do what needs to be done at the right time.”
Heng, who spoke to a packed room of delegates and media about the role of Singapore within the region, also highlights the impact of digitalisation in finance, which he terms “the lifeblood of the economy”.
“Where that lifeblood flows is critical – whether to the right or wrong places. And an important part of how we build a financial system to ensure both stability and growth is to ensure a close coupling between the real economy and the financial system,” he says. “More than that, financial innovation must continue to happen. But the question is how we can handle financial innovation well, and where the needs are in our economy and society, [towards] where financial resources will make a difference.”
In the aftermath of the Asian Financial Crisis of the late-90s, Heng says regulators and finance ministers have met regularly to come up with how the region can promote financial inclusion and how digital finance can achieve that.
“One major change that is happening today is you can move [a] bank into a mobile phone, and I believe this technology is going to reshape what money means – as a medium of exchange, as stored value—and change how we [conduct] payments and ecommerce in ways that are secure and efficient,” he adds.
While the region is undergoing many changes, Heng says, it is also spurred by collaboration – whether through the long-standing ASEAN Free Trade Area or other regional economic collaborations. “This is a good trend... [but] we must, of course, be non-exclusive in how we do this. This is not going to be fortress Asia, this is a way catalysing the multilateral system to continue injecting momentum,” he says.
During the 45-minute long session, Heng also spoke about the government’s continued investment into education. “We have always placed great emphasis on education, because the only resource we have are our people [and] it is a very important responsibility of the government to [equip] our people to be at their very best,” he says.
Heng also noted the government’s commitment towards extending learning beyond the confines of just the formal education years, expanding education in pre-schools to strengthen foundations, helping families with bigger subsidies to manage the costs of pre-school, as well as creating lifelong learning opportunities for all.
