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Delivered Remarks by Minister Chan Chun Sing at Release of Third Quarter 2020 Economic Survey of Singapore

Delivered Remarks by Minister Chan Chun Sing at Release of Third Quarter 2020 Economic Survey of Singapore

1. The latest QES figures show that we are on the right path, slowly but surely. a. In the third quarter of 2020, the Singapore economy expanded by 9.2% on a quarter-on-quarter seasonally-adjusted basis, a turnaround from the 13.2% decline in the second quarter. b. On a year-on-year basis, the economy shrank by 5.8%, a smaller contraction than the 13.3% decline in the second quarter. c. Total employment continued to contract in the third quarter of 2020 (-26,900) but at a significantly slower pace as compared to the previous quarter (-103,752).

2. While things have improved from August 2020, where we posted our worst quarterly performance on record, there is still much work to be done.

Tough and cautious, but correct approach

3. Looking back, it has been a bruising year for everyone.

4. When news of the virus first broke almost a year ago, few would have imagined we would still be fighting the virus today. Even fewer would have imagined the devastation wrought on economies around the world.

5. Singapore has not been spared – COVID has affected and changed our lives in irreversible ways.

a. Businesses, big and small, local and foreign; Employers and employees; young and old, have all had to learn and adapt.

6. While we did not have all the answers initially, we learned and adapted quickly, and did not let initial setbacks derail our efforts.

a. We intervened quickly to isolate, test, and treat.

b. We were nimble and creative – like converting floating platforms and cruise ships to house foreign workers.

c. We put in place processes and systems to ensure people could move around and interact more, without compromising on health and safety.

7. We saw the potential impact on jobs and the economy

a. And we acted decisively to put in place schemes like the Jobs Support Scheme to stem the tide

b. For us, flattening the unemployment and business closure curves were as important to us as flattening the infection curve.

c. While we will not be able to save all jobs and businesses, the situation would have been a lot worse without the quick economic interventions.

8. Today, our community infection number is zero or near zero, and this has been for some time.

a. We have been able to resume activities that seemed unlikely just a few months ago, including weddings, MICE and sporting events.

b. We have been able to gradually reopen our borders with more countries.

c. There is a glimmer of light near the end of the tunnel.

Factors impacting economic recovery

9. There are four factors that will impact the rate of economic recovery domestically and globally.

a. Two are more within our control and two are not.

10. The first factor within our control is our infection rates.

a. If we are able to continue to keep our infection rates low, we will be able to resume more activities and increase our interactions with the rest of the world.

b. This will require the continued cooperation of our people to adhere to the prevailing measures.

c. We have done well and must continue to keep up the strong momentum.

d. But we must not be complacent. Many countries around the world have seen their numbers spike again, even those who had seen some success in controlling the situation earlier.

11. The second factor within our control is the ability of our businesses and workers to pivot and adapt to the new realities of a COVID world.

a. Throughout this year, we have been especially focused on helping workers and businesses to adapt to the new realities in a COVID world.

b. Helping workers to train, retrain, and upskill, retain current jobs, find new jobs.

c. Helping businesses to transform, re-orientate, and reorganise themselves.

12. We are starting to see the results from the measures and programmes we put in place.

a. We have placed more than 33,000 local job seekers under the SG United Jobs and Skills Package.

b. From January to September 2020, enterprises tapped on the enhanced Enterprise Development Grant and Productivity Solutions Grant and embarked on over 20,000 projects to improve productivity and build capabilities with. This is more than three times the number of applications in a similar period last year.

c. We know the journey to transform has not been easy and we applaud all who have made the leap to do so.

13. Now let me go on to the factors outside our control. The first is the geopolitical dynamics between the big countries such as the US and China.

a. We do not yet know how the new US Administration will approach its relations with China.

i. But we hope both sides will dial down tensions, and return to a more open and inclusive global economic order.

ii. As I said a few weeks ago, the path forward lies in greater interdependence, rather than independence or autarky.

14. The second factor outside our control is the recurring waves of infection happening globally.

a. As people grow increasingly fatigued with COVID measures, Governments will need to muster greater political will and determination to stem the spread of the virus.

b. New and more frequent lockdowns will have a knock-on effect on global demand which will affect export-oriented economies like Singapore.

15. While there is much excitement over the progress of vaccine development, it will not be the quick fix that many expect it to be.

a. Manufacturing enough doses, then distributing and vaccinating a significant population of the world, will take many months, if not years.

16. So long as we manage the controllable factors well, and mitigate the risks of those beyond our control, I believe we can recover more quickly.

a. We now have the testing capabilities, isolation facilities and healthcare capacity to manage risks from imported cases, to ensure they do not infect the local community.

b. Therefore, we will be able to open our borders more.

i. We will allow more Singapore-based business people to travel overseas

ii. We will resume bringing in the necessary professionals and workers that complement our workforce, drive our economy and support our social services

iii. We will also be able to progressively host more significant MICE events to maintain our position as a leading business node. I will speak more about this on Wednesday at TravelRevive

iv. The number of imported cases may rise, but the risk to the local community will be mitigated

c. Domestically, we will also allow more activities to resume.

d. I understand many are looking forward to Phase 3.

e. Whether we call it Phase 2X or Phase 3, what’s more important is to maintain our psychological vigilance to keep up with the prevailing safe management measures,

i. Take a calibrated and progressive approach to resuming our economic and social activities in a safe and sustainable manner.

Pivoting Government support

17. I know that many are worried about what will happen once the support schemes taper off and end over the coming year.

a. I assure our businesses and workers that the Government will not leave anyone behind.

18. But just as our workers and businesses are pivoting, so must our support.

a. Our support measures must be sustainable in the long run.

b. It is not possible for us to indefinitely support business models that are no longer relevant and competitive in a COVID world.

c. Going forward, our support must be more targeted and focused on positive outcomes for our businesses and workers.

19. Our support over the last few months has given businesses and workers time to regroup and re-evaluate their business models.

20. It is now the time for our businesses to act decisively to not only prevent further losses but to seize new opportunities. We will support our businesses to:

a. Strengthen existing capabilities while building new ones

b. Expand into new markets beyond Singapore

c. Digitalise and access consumer demand through online platforms

21. We have enhanced and extended our support schemes over the years

a. And we will continue to adjust our levels of support purposefully, with a view to create good jobs and opportunities for Singaporeans, and enabling businesses to grow. Conclusion

22. While we are turning the corner, we still have a long way to go in our economic recovery.

23. Many have asked when our economy will return to pre-COVID levels.

a. Quantitatively, I believe it is only a matter of time before we do so.

b. However, what is more important is the qualitative aspect.

24. Even if we rebound quantitatively, the economy will have changed permanently.

a. Surge in digitalisation and technological advancements

b. Greater need to balance resilience with efficiency

c. Changes to global production and supply chain patterns All these would have changed our economy permanently.

25. When the dust settles, it will not be the same economy we knew pre-COVID a. A new equilibrium and a new playing field will emerge

26. Amidst the current challenges, there is an opportunity for us to establish the foundation for Singapore’s success beyond the short- to medium-term. We will do so by:

a. Striking a balance between managing the infection risks while gradually restoring more domestic activities and opening our borders.

b. Continuing to attract top companies to invest in Singapore, particularly in new growth areas, and to buttress our position as a key node in global markets and value chains.

c. We will support our businesses and workers in their transformation and growth journey. Programmes such as Scale-Up and Enterprise Leadership Transformation (ELT) are part of this move.

d. Improving the job-matching between employers and employees, and helping companies seek new revenue streams will also be part of this plan.

e. We will continue to develop our talent pipeline and talent networks around the world.

i. We will support and nurture Singaporeans via programmes such as the Singapore-Industry Scholarships, the TechSkills Accelerator and the Global Ready Talent Programme.

ii. We will connect with and bring in top-end global talent who will create new opportunities for us through programmes such as Tech@SG, the recently launched Tech.Pass and the Global Innovation Alliance.

f. We will continue to pathfind new FTAs and DEAs to allow companies based out of Singapore to have greater and more assured access to the world as our hinterland and markets.

27. If we are able to help our businesses and workers make the necessary adjustments and pivot quickly, I have every reason to believe that we will emerge stronger from this crisis.

28. Thank you.

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