1. Thank you, Mr. Speaker, for allowing me to join this debate.
2. The most important message of this Budget is about preparing Singapore for the future.
3. This future is one where we expect significant challenges: more physical constraints being felt – of land, of water, of air space, of transport capacity; a more aged population; a population that will have ever higher expectations and sometimes less able to give and take.
4. But this future is also one that holds much promise: a stronger Singapore Core workforce; a country capable of sustained, reliable Whole-of-Government, Whole-of-Society responses to problems and possibilities, a people that sees seeking the Greater Good and the Common Good as important as advancing Self Interest.
5. For today, I wish to focus on the importance of building the Singapore Core workforce.
6. I recently travelled to the Chinese city of Chongqing. At the Singapore airport, I picked a copy of the March issue of the Harvard Business Review.
7. I was attracted by the frontpage title – Special Report: Reinventing America – why the world needs the US to bounce back; and Stop blaming China and India for America’s economic problems.
8. Inside, article after article cried out for action to move the American economy and workforce back on track. “A Jobs Compact for America’s Future” called for productive dialogue among their tripartite partners, and for renewed badly needed investments in the reading and math education for its young and strengthening the capabilities of their workforce. “A warning sign for Global companies” sounded the alert that America needed to do more to attract and retain MNCs on its soil if it wants the jobs and the technological lead that such companies produce and bring. “Fixing what’s wrong with US Politics” lamented how the urge for one-upmanship has resulted in dysfunction and malaise, and the loss of long-term focus.
9. I said to myself: If this is how the Americans are coming around to seeing their situation and what they need to do to forge ahead, then forge ahead they will!
10. As it stands, American productivity is higher than ours. And where would Singapore’s position be in that scenario, competing with such a revitalised giant that is bent on getting even better?
11. We landed in Chongqing around noon, and after a quick lunch, headed for a dialogue with city officials. We were briefed by several officials in the areas of overall economic development, trade, finance and manpower development for the megacity of 32 million people.
12. The officials relished in their descriptions of how fast the City has developed in the last decade, and especially in the past several years. They highlighted their ambitions and their plans for rapid Urbanisation, Industrialisation and Internationalisation – and how successful they had been in taking investments and jobs from the big cities on the east coast, and how a growing list of big name companies are converging and clustering into Chongqing, lured by promises of cheap land, cheap utilities, cheap logistics, cheap financing and cheap manpower.
13. But one thing really struck me – the officials spoke of how they have systematically sourced cheaper manpower from the City, then its suburbs, its countryside and then the surrounding towns and provinces. Why did they do that? To lower manpower costs by bringing in cheaper manpower than what they could find in the City itself. And they were proud that that strategy had given them that pricing advantage over the coastal cities, and had persuaded some companies to relocate away from the coast into their City.
14. That strategy sounded very familiar indeed. And I asked myself: can we outdo the Chinese cities in such manpower sourcing? Now? In the medium term? In the long run? And if we can’t, then what would become of our economy?
15. To my amazement, the Chongqing officials then said that they also knew that this “cheapsourcing” strategy was not sustainable even for them in the longer term, because they saw what happened to the coastal cities as development picked up steam. First, cheaper locations will look increasingly attractive. Second, as the surrounding areas develop, their residents would be able to find decent work without venturing afield. It would then be more and more difficult to amass cheap manpower. They have to foster competitiveness differently for the medium to long term. For this reason, they are aiming to use the cheap factor strategy to buy time to develop into higher value production and services, so that they would not be caught in the lurch eventually.
16. I told myself: Singapore’s better watch it and get our act together fast. For many years, we have fuelled out growth through growing the size of the workforce. This is successfully brought us to where we are today.
17. To go further, we have to pick our approach wisely. We have to judge whether relying on an ever expanding inflow of external supplementary manpower will secure our competitiveness now and in the long term. What makes us think that the economic development that will occur in the home countries of our foreign labour sources would not naturally reduce the need and desire of their populations from wanting to leave home and work abroad? And if that happens, and if we are still bound to a model that critically depends on their free and abundant availability, would we not be exposing ourselves to unacceptable risks? And even if that does not happen, would we not at least be slowing our pace of innovation and transformation simply because of the painkiller than we can consume for the moment?
18. Sir, the experiences of America and China in the past and their strategies for the present and future are important signposts for us. Those ahead are recommitting to strengthening their core attractiveness, competitiveness and innovation in order to stay ahead. Those behind are milking all the advantages of their natural resource endowments to steal a match on the others, while simultaneously retooling for progress and success in a more resource-scarce future.
19. Singapore must not spin our wheels and live in the past. Our methods must change in the light of these realities, and climb the productivity and innovation ladder as quickly as we can, while time and opportunity still permit.
20. I have 7 ideas to suggest. First, as this transformation will impact the whole economy and SMEs would be most impacted, there must be proactive outreach to them, and not just a passive array of schemes for them to come forward to tap.
21. Second, close monitoring of job displacements so that help can be extended early and in a targeted manner.
22. Third, job banking must be stepped up. As more businesses are impacted and their workers have to move to new jobs, job banking and job matching will become a critical success factor.
23. Fourth, outreach must be done in different languages and not only English, to take into account the reality of many SMEs.
24. Fifth, the connecting of labour supply to labour demand through re-employment, back-to-work women workers and the upgrading of jobs, technology and image of SME jobs must be stepped up, so that companies can have a viable alternative to external manpower sources.
25. Sixth, wage levels must be monitored to give an ongoing sense of how the transformation is actually impacting the outcome for workers at all levels.
26. Finally, a national level Award should be created to recognise companies big and small for their effective and genuine efforts and initiatives to create and nurture a Singaporean Core workforce.
27. Let us put away the wishful thinking and hunker down to searching for new and smarter ways to use our manpower, and to sharpen the capabilities of our manpower. We must build our Singaporean Core before it is too late.
28 Thank you.
