SPEECH BY SECOND MINISTER FOR TRADE AND INDUSTRY DR TAN SEE LENG AT THE COVID-19 VS. ECONOMY: CITIES IN THE FACE OF NEW GLOBAL CHALLENGES FORUM
17 MARCH 2021
Deputy Mayor of the City of Moscow for Economic Policy and Property and Land Relations, Mr Vladimir Efimov,
Distinguished speakers, guests, ladies and gentlemen,
A very good afternoon from Singapore.
1. I am pleased to have the opportunity to join you virtually at today’s panel to share Singapore’s efforts in combating the COVID-19 pandemic, and how our nation is seeking to emerge stronger from this crisis.
Impact of the COVID-19 pandemic
2. The world has changed considerably due to COVID-19.
Global merchandise trade fell by 9.2 per cent in 2020, contributing to a 4.8 per cent contraction in global GDP.
Many countries, including those in the Eurasian Economic Union (EAEU) and ASEAN, experienced historic full year recessions in 2020.
3. Being a small and open economy, Singapore was also adversely impacted by the profound shifts in global trade which was caused by the pandemic.
Singapore’s economy contracted by 5.4 per cent in 2020, the worst recession since our independence in 1965.
Sectors like tourism, hospitality and aviation bore the brunt of the impact due to global travel restrictions.
- Singapore’s visitor arrivals fell by 85.7 per cent and our tourism receipts declined by 78.4 per cent.
4. However, the unique circumstances of the pandemic have also brought about opportunities.
For example, Singapore has leveraged our credibility as a reliable and trustworthy investment destination:
- Global companies across a diverse range of sectors like DB Schenker (shan-ker), Dell, PayPal, Tencent and Zoom have continued to invest in Singapore, notwithstanding the uncertain global economic climate.
- In 2020, we attracted investments amounting to US$13 billion in Fixed Asset Investments, and US$5 billion in Total Business Expenditure.
- These investments are expected to create more than 19,000 jobs in Singapore over the next five years.
- They signal the international business community’s confidence in Singapore’s efforts to combat the COVID-19 pandemic.
Policies adopted by Singapore to address economic challenges posed by the COVID-19 pandemic
5. Singapore continues to keep a look-out for other opportunities, while taking steps to address the economic challenges posed by COVID-19.
We have adopted a three-pronged approach, which seeks to:
- Stem the spread of the virus,
- Flatten the unemployment and business closure curves, and
- Maintain our external connectivity and global relevance.
6. First, before we could address the economic fallout, we had to stem the spread of the virus.
Singapore embraced contact tracing early on in the pandemic.
We have also implemented mandatory mask wearing, and strict social distancing measures to minimise local transmission.
While a difficult decision at that point in time, we put in place a ‘Circuit Breaker’ measure, which was an almost two-month long stay-at-home order, to pre-empt escalating infection rates.
- This gave us valuable time to increase our medical capacity and develop our testing capability, ensuring that our hospitals were not overwhelmed at any point of time.
Through the joint effort of everyone, we managed to cut, and more importantly, maintain local transmission to almost zero, up to this day.
7. Second, flattening the unemployment and business closure curves were just as important to us as flattening the infection curve.
Singapore committed close to S$100 billion, or 20 per cent of our GDP, in economic, social and public health support in 2020.
- Without such policy interventions, Singapore’s GDP would have shrunk by at least 12.4 per cent, which is more than double the contraction we have experienced.
To mitigate the uneven impact of the recession, we tilted our support measures towards more affected sectors, smaller firms and lower-income households.
8. Third, as an open and trading economy, maintaining our external connectivity and global relevance is crucial.
No economy can recover on its own, and it is clear how important it is for countries to work together.
An immediate initiative we had when the crisis hit was agreeing with partner countries to keep supply chains open.
- We signed agreements and joint ministerial statements with several countries globally, reaffirming this commitment.
- This not only helped to keep essential supplies flowing through the crisis, but also positioned Singapore well for economic recovery.
Even amidst the challenges of the pandemic, Singapore, along with our ASEAN partners, signed the landmark Regional Comprehensive Economic Partnership or RCEP last year, with Australia, China, Japan, South Korea, and New Zealand.
- This is the largest Free Trade Agreement in the world, and covers one third of the world’s GDP and population.
- Once it is ratified, RCEP will contribute to placing the Asia region as the centre of global economic recovery and an attractive investment destination post COVID-19.
We also signed the United Kingdom-Singapore Free Trade Agreement in December 2020.
Within Latin America, we announced substantial conclusion of the Pacific Alliance – Singapore Free Trade Agreement in December 2020, and are progressing with the MERCOSUR-Singapore Free Trade Agreement.
Notably, we are working to deepen our trade relations with Russia and the Eurasian Economic Union through the EAEU – Singapore Free Trade Agreement and the Russia-Singapore Services and Investment Agreement that we are currently negotiating.
9. Apart from trade agreements, Singapore has been looking to expand our cooperation in technology and the digital economy, which were brought to the forefront during the COVID-19 pandemic.
Singapore signed two pioneer agreements in 2020:
- The Singapore-Australia Digital Economy Agreement, and
- The Digital Economy Partnership Agreement with Chile and New Zealand.
We see digital integration as the way of the future.
Countries can transcend the traditional constraints of geography and distance, and leverage each other’s strengths to unlock the full potential of our economies.
Policies adopted by Singapore to address economic challenges posed by the COVID-19 pandemic
10. Of these approaches I have mentioned, pertinent to many governments’ priorities would be the second prong.
I would like to share a bit more about some of Singapore’s strategies in this area with you today.
We are not returning to a pre-COVID-19 world.
Even if GDP figures recover quantitatively, our economies will be qualitatively very different.
- Some sectors will progressively recover, while others will have to pivot or restructure.
11. Singapore has therefore adopted a nuanced and targeted approach.
For firms in sectors with good growth prospects, such as biomedical manufacturing, we are helping them to scale faster and create more jobs for our workers.
For firms in sectors facing a temporary drop in demand, such as aerospace manufacturing, we are helping them to preserve capabilities and tide over this period.
For firms in sectors which have changed permanently, such as social entertainment, we are helping them to pivot into new markets and new businesses.
We will continue to adjust our levels of support purposefully in close collaboration with our businesses.
12. As for our workers, Singapore has introduced support measures and career conversion programmes to help them tackle challenges that have arisen on the employment front.
These programmes help support our people in upskilling and reskilling, so that they can acquire the industry relevant skillsets and experience, to move into new roles in growth sectors.
13. To secure our future, we must build new capabilities in our business and our people, and find innovative ways to work together, both within our own countries and beyond our shores.
14. Looking back, it has been an unprecedented and difficult year for everyone.
Few among us would have imagined that we would still be battling the COVID-19 pandemic today.
Fewer would have foreseen the devastation wrought on our economies.
15. This crisis has reinforced the importance of having like-minded and trusted partners.
It is more critical than ever for us to work together to maintain warm friendships, keep markets open, and ensure that global supply chains remain connected and resilient.
16. While we are turning the corner, there is still a long road to recovery.
It is now time for us to shift our focus to seize opportunities in the new equilibrium as the dust settles, and jointly chart a new path for the future.
17. This forum is an excellent step in a positive direction.
It allows us to share experiences and ideas with friends and partners.
18. I would like to thank the Government of Moscow for hosting this and inviting Singapore’s participation.
- Russia’s economic response to this crisis has been similar to Singapore, and we share your relentless efforts in managing the pandemic.
- In particular, Russia’s development of the Sputnik V vaccine, one of the first vaccines developed in the world, was an invaluable contribution to the global fight against COVID-19.
19. I look forward to learning from the other distinguished speakers and wish the panel a fruitful discussion.
20. Thank you.