Professor Lily Kong, President, Singapore Management University (SMU)

 

Professor Alan Chan, Provost, SMU

 

Professor Jia Li, Dean of the School of Economics, SMU

 

Distinguished guests,

 

Ladies and gentlemen,

 

1. Good afternoon to all of you.

 

2. This year’s MTI Economic Dialogue is taking place against a backdrop of heightened uncertainties in the global economy. 

 

a. Since ‘Liberation Day’, the US has made deals with its key trading partners, such as the EU, Japan and South Korea, and implemented reciprocal tariffs on those without a deal.

 

b. It has also extended its truce with China. 

 

c. However, there are still significant uncertainties.

 

i. Negotiations with China, India and Switzerland are still ongoing. 

 

ii. Details on how the deals will be implemented remain unclear, and in fact, we have already seen a number of conflicting interpretations emerge. 

 

iii. The US has hinted that further sectoral tariffs, such as on semiconductors and pharmaceuticals, are imminent. 

 

iv. The effects of the tariffs will take time to flow through our supply chains, and we can expect these costs to exert margin and price pressures in time to come. This will impact both consumer and corporate spending, and slow down growth in the global economy. 

 

d. We must also watch out for the next-order effects of the tariffs. 

 

i. Countries impacted by the tariffs may adjust their trade and investments with other economic partners. 

 

1. For example, if a country has now decided to buy more agricultural products such as rice and soybeans from the US, it may decide to buy less from its other trading partners. 

 

2. Countries which have pledged investment commitments in the US may decide to scale back their investments in other parts of the world, including in Singapore. 

 

ii. Companies are also likely to re-evaluate their longer-term plans in response to the new tariffs. 

 

1. For example, companies may decide to restructure their production and supply chains to take advantage of lower tariff levels imposed on certain markets for their exports to the US. 

 

2. Companies may also decide to diversify their markets and supply chains.

 

3. Earlier this year, we formed the Singapore Economic Resilience Taskforce (SERT) to help Singapore navigate the near-term uncertainties, and to chart our way forward in the new economic landscape. 

 

a. Our focus at the start was to strengthen our collective sensemaking of the tariff developments, as well as to help our businesses and our workers manage the immediate impact of the US’ tariffs. 

 

i. Last month, we announced that we will introduce the Business Adaptation Grant that will be rolled out next month to help businesses adjust to the new landscape. 

 

ii. And last week, we announced that we will roll out the Graduate Industry Traineeships programme from October to help fresh graduates gain industry-relevant experience and skills, which will facilitate their transition into full-time employment. 

 

b. Even as we manage the immediate uncertainties, we also need to position Singapore well for the new economic landscape. 

 

c. This is why we recently convened an Economic Strategy Review under SERT to develop a forward-looking economic blueprint for Singapore, with five committees formed. The first one is to strengthen Singapore’s global competitiveness; the second one to leverage technology and innovation; the third, to nurture our entrepreneurship; the fourth committee, to enhance human capital; and the last committee, to manage the impact of the restructuring process. 

 

4. The ESR will study how we can navigate structural shifts, so that Singapore can continue to thrive and stay relevant in the future economic landscape. 

 

a. One such shift is in technology, such as AI.

 

i. The acceleration of developments in AI, combined with automation and robotics, will reshape industries and jobs. 

 

ii. We must encourage our companies to invest in practical AI solutions that will help them raise their productivity, accelerate time-to-market, and drive the creation of new value-added products and services.   

 

iii. At the same time, we must proactively identify job roles that will be affected by AI, so that we can target our upskilling and reskilling interventions to help our workers move into higher-value jobs enabled by AI. 

 

iv. And most importantly, we want to transform both enterprise and workforce transformation in a complementary way, so that AI becomes a tool for enhancement, and not displacement, of labour. 

 

b. As we grow our economy, we must ensure that the benefits and opportunities are shared; otherwise, economic progress may become divisive, instead of inclusive. 

 

i. This is especially if our society becomes more stratified and less mobile, which may not only entrench the disadvantages faced by the less well-off but also the advantages faced by the more well-to-do. 

 

c. I spoke earlier about our efforts to reskill and upskill our workers in AI – more broadly, we have been renewing and refreshing our efforts at skills upgrading, to help our people stay relevant to the changing demands of businesses and industries.

 

i. Last year, we enhanced SkillsFuture with a Level-Up Programme, to encourage and support Singaporeans to undertake a significant skills reboot in the middle of their careers. 

 

ii. By doing so, we want our people to be equipped with the skills to take advantage of the opportunities in new industries and new jobs in the future economy. This will in turn enable them to benefit from economic development, achieve real wage growth, and raise the standards of living. 

 

iii. At the same time, we must pay attention to segments within our population who are at greater risk of being left behind. These include PME roles that may be replaced by AI, and rank-and-file workers in sectors that are undergoing restructuring. 

 

1. This is why we had introduced the SkillsFuture Jobseeker Support Scheme earlier this year, to provide temporary financial support for individuals who may be involuntarily unemployed. 

 

2. However, with greater volatility in the economic landscape ahead, we are studying the need for broader, system-level support to help them bounce back into gainful employment.

 

Role of Economists

 

5. As we chart the next chapter of Singapore’s economic transformation, our economists play a vital role by providing policymakers with rigorous, evidence-based analysis and policy insights. 

 

a. Through their analysis of structural changes in the global economy, such as the shifts in investment and trade flows that I mentioned earlier, economists help us stay ahead of these shifts, so that we can position ourselves early and move fast when the opportunity arises. 

 

b. The work of economists also helps policymakers to identify areas of opportunity, and guide the design of our policies and programmes to allow us to seize these opportunities. These in turn can help us design more targeted interventions in our industry development, enterprise transformation and workforce reskilling. 

 

c. By evaluating the impact of policies and programmes, economists also help policymakers understand the real-world impact of their policies and decisions, and guide them in calibrating their measures to achieve the right outcomes. 

 

i. For example, economists have studied the effectiveness of capacity-building programmes such as IMDA's SME Go Digital programme, as well as programmes that were implemented during recessions – such as the Jobs Support Scheme and Jobs Growth Incentive scheme. 

 

ii. The findings of such evaluations have helped policymakers refine our programmes to better support firms and workers, and achieve better outcomes. 

 

6. Today, I am pleased to present the Economist Service scholarship and academic awards to our budding economists. To all the recipients, my heartiest congratulations to you on your achievements, and I look forward to your contributions to the Singapore economy in time to come. 

 

7. This year, we celebrate SG60. We should take heart in how far we have come and the strong foundation we have built – indeed, for a small country with no natural resources to achieve the economic success we have today is truly no mean feat. 

 

8. Amidst a more uncertain, volatile and even disruptive world ahead, let us continue to be bold and stay nimble, so that we can overcome the challenges and seize the opportunities ahead of us to grow our economy. 

 

9. And while we push for economic growth, we must continue to strengthen our society, stay united and work together, so that we can build a stronger, more dynamic and more resilient Singapore. 

 

10. Thank you.