Speech at Confluence 2007
Dr Ng Eng Hen, Minister for Manpower and Second Minister for Defence, The Shangri-La Hotel
Good Afternoon Ladies and Gentlemen,
1. It gives me great pleasure to be here with you at this year's Confluence. I first heard of Confluence last year from Minister Teo, the GOH then. He was animated about a number of positive things – how this was self-initiated, the energy and buzz, the lively interactions and so on. As leaders within Government, examples like these are much needed and they uplift us. They speak to us that our citizenry is engaged, thinking about our present problems and on their own playing a constructive role in shaping our future. We are often cheered even through isolated incidents like an email or letter that shares a citizen's or foreigner's view about what he or she likes about Singapore. We pay special attention to opinions and criticisms especially from Singaporeans, young and old, who have worked or travelled widely because they know how the World works and can offer insightful suggestions for us to keep our edge. This is why I strongly support this meeting, Confluence, which you have organised. It is a ground-up initiative and clearly addresses a demand from young Singaporeans, both studying here and abroad, to remain plugged in to national issues and challenges, and to link Singaporean students up with the corporate sector.
Globalisation – Impact on Singapore
2. Moses and his team asked that I speak on the theme: “Globalisation – Can Singapore Endure?” It's a relevant theme. Globalisation has lifted hundreds of millions out of poverty, but also poses challenges that can overwhelm those who are unprepared. There exists “unknown-unknowns”, to which we can only respond. SARS was such an example. I will share our concerns over more imminent known threats later. These challenges aside, my direct response to the question is: Yes, not only will Singapore endure, we are poised to flourish. Over the next decade, if we make the right moves, we are likely to ride high on another wave of globalisation that is centred on Asia – the fastest growing region in the World, expanding at a blistering pace of 8.3% in 2006, registering its fastest growth since 1995. Your generation will witness a re-invigorated and renewed Singapore, as this tide carries us up to a higher plane from today. I will give reasons for my optimism. But if we work hard now, we will leave to our children, a Singapore that can continue to promise a way of life on par with other first-tier developed city-states. It will be a place that continues to put a premium on educating everyone to their maximum potential; on providing a clean wholesome physical environment that is safe to live, work and play; where opportunities abound and that values and respects the contributions of all its citizens.
Singapore – Riding the Wave of Globalisation
3. Why do I think Singapore is set to soar?
4. First, history can and does repeat itself. Many of our comparative advantages and prosperity were due to policies that positioned us early to ride the wave of globalisation. In the 1960's and 1970's, many countries adopted policies such as import substitution or nationalisation to create state-owned enterprises. We were the outlier and premised our growth closely on world trade. In spite of and some would argue because of our weaknesses – small domestic demand, no hinterland and natural resources, small population base and workforce – we chose policies by default that expose ourselves to the full forces of the external environment. It meant that we had to compete globally and depended on us being relevant to the World around us. Today, our external trade is more than three–and- a-half times our GDP and our successful policies in hindsight, no brainers. But in the 70's it was not so, and it was a “big-bet”. This was well before the collapse of the Berlin Wall in 1989, which marked the beginning of the end of Communism and before Deng Xiao Ping's efforts to modernise China's economy – both which occurred in the 1980's. It was a correct vision but one that required undistracted resolve and commitment to the course. We could have been swayed off course at many junctions and challenges.
5. The first step in the right direction is always a good one. We were unattractive to investors but made ourselves attractive and courted global MNCs to move to cheaper and more efficient Singapore to manufacture and export. We provided land, indeed created land where none existed, as we did through JTC. Less than 50% of our people completed Secondary Two education then, but we upskilled our population in a frenzied pace and opened ourselves to sources of know-how. The Japan-Singapore, German-Singapore, French-Singapore training Institutes set up by the EDB were forerunners of our polytechnics that today are regarded as a central pillar to produce our skilled technical manpower. For instance, the history of Nanyang Polytechnic (NYP) can be traced back to these predecessor institutions of the late 1970's and early 1980's. These joint training institutes with the foreign governments helped provide skilled manpower for the newly established industries then. Indeed, BERI has consistently ranked us as the top country in their Labour Force Evaluation Measure for almost 30 years, since 1978. Our basic approach was to expose ourselves fully to the economic pressures at work, and ride that vortex to the top. We believed in our vision and ourselves, were united in commonality of purpose and implemented difficult changes to achieve long-term goals. We resolved not to be hindered by our weaknesses and indeed turned them into strengths.
6. As a result, after four decades, Singapore has miraculously transformed itself from a sleepy trading entrêpot to a thriving R&D base for MNCs, a transport hub, a regional financial centre and even a pioneer of water technologies today. We capitalised on our strategic position, between the East and the West, to facilitate world trade. The set of circumstances that threw up a confluence of positive factors – right leaders, farsightedness, a united populace – ensured prosperity for about 25 years.
7. A decade ago, in 1997, the Asian financial crisis hit, followed by terrorist threats from 9/11 and biological threats like SARS. It was a pregnant pause, a wrenching time, with self-doubt and loss of confidence – for the region and some Singaporeans. An MP asked – had the music stopped? I entered politics in 2002. In essence we were faced with the same challenge – 1970 re-loaded. How do you continue to be relevant to an ever changing region and World?
Young Singaporeans – Expanding Opportunities Here
8. Instead of wallowing in doubt, we made bold strategic changes and invested heavily to position ourselves to catch the next tide. We needed to transform our city to regain relevance – to diversify our economy to higher value- add, and other sectors, including an expansion of the services sector. Many of our initiatives worked – including wage restructuring and upskilling. The result – the World has noticed that we have re-invented ourselves. The flow of investments in projects and property here is a proxy of their confidence in us long term. The advance estimates for real GDP rose by a sterling 8.2% last quarter – its fastest in 15 months and surpassing all market predictions. Underpinned by strong growth in the biomedical manufacturing and transport engineering clusters, as well as the financial services cluster, the manufacturing and services producing sectors are estimated to have grown by 10.2% and 7% this quarter. The construction sector is also experiencing a boom, with an expansion of near 18%. Total employment grew by 49, 400 in Q1 this year. Overall unemployment rate remained low at 2.9% in March 07. These present ample opportunities and jobs that we need able people to fill. Along the way, I will share new types of capabilities that we will require as our economy further develops. It will need expertise that you have or need to acquire.
Expanding Sectors
Biomedical Sciences, R&D
9. As we did in the 1970's, we are focussing on not all, but a few key areas, where we have traditional strengths or strategic advantages. We have become an exciting hub for Biomedical Sciences in Asia with the building of Biopolis under Phase 1 of the Singapore Biomedical Sciences initiative. The sector now contributes to 5% of Singapore's GDP and S$18 billion to the total manufacturing output. We have S$5 billion to the R&D Trust Fund for building a knowledge hub here to discover and develop future breakthroughs and products for the market. We have also moved into the second phase of translational and clinical research ie, to bring discoveries from the bench to the bedside. Major pharmaceutical companies like Merck, GlaxoSmithKline and Eli Lilly are building their R&D facilities here. Top scientists have committed to stay here – e.g. Edison Liu, Alan Colman, and David Lane who have relocated to Singapore to lead our Research Institutes and companies. We will need talent to spur these initiatives - scientists, research physicians, biomedical engineers, computational mathematicians, chemists, physicists; venture capitalists, patent lawyers, clinical trials coordinators, ethicists, marketing experts – the list goes on.
Digital Media, Creative Industries, IT
10. The second expanding area is the Creative Industries Development Strategy. The Ministry of Information, Communications and the Arts (MICA) is spearheading this and will be investing more than S$200 million over five years to develop the creative cluster. New areas of growth range from animation, games to broadcasting and film-making. On the digital broadcasting front, there are new platforms for distributing content, such as mobile TV and Internet Protocol TV. MDA has issued three mobile TV trial licences to PGK Media, Innoxius Technologies and GoMobile to test their innovations and business concepts here. Harris Stratex, the largest independent supplier of wireless transmission systems in the world, has recently made Singapore its base to develop global wireless applications and solutions. EON Reality, one of the world's leading interactive 3D software providers, will also build its Headquarters and R&D centre in Singapore, displaying state-of-the-art 3D and holographic tools to integrate sales, marketing, collaboration and interactivity for customers. One of the top animation schools, Sheridan College from Canada, whose many students have gone on to work for major animation studios such as LucasFilms, Pixar and Disney, has also decided to set up a campus here next year. This is indeed timely as this expanding sector will need new knowledge, skills and expertise in professions such as Animators, Computer Graphics Artists, and Solutions Architects.
Tourism, MICE, Integrated Resorts, F&B
11. The third big area is entertainment and leisure. Asia's growing rich - more than 2.4 million high net-worth individuals that hold more than US$1 million in financial assets - will seek out tourist and foreign destinations. They will need services – financial, banking, personal services. They will have lifestyle aspirations to fulfil. Singapore must tap this growing market. Over the next few years, a number of large projects coming onstream will transform Singapore's skyline and fuel our tourism industry. The Marina Bay will become the new node of vitality, with the Integrated Resort (IR) surrounded by a seamless network of commercial, residential and entertainment developments. Near the Singapore's waterfront, we will also have Gardens by the Bay to showcase our champion tropical hybrid flowers and other exotic temperate plants. Singaporeans and tourists will be able to stroll through the parks, sit by the waterfront promenade and watch the National Day celebrations held at the Bay. Companies will benefit from state-of-the–art buildings with cutting-edge environmental friendly technologies. We are also rebuilding Sentosa to house luxurious residences with marina piers and world-class recreational facilities for all to enjoy the sea, sun and sand.
Powered by Engines of Asia
12. The second reason is that this region, and I mean Asia, is poised to take off and will be the growth area for the next foreseeable decade. Consider the fundamentals. If Singapore could do well from the 1970's to now during the Cold War, we are poised to further deepen that role as more markets from China, India, the Middle East and Russia have entered or increased their participation in the global trading system.
China, India, the Middle East and Russia
13. China's economic growth, despite concerns of over-heating, continues to grow at a blistering pace, by an annualised rate of 11.1% in the first quarter of this year. India similarly charts a rosy path, growing by 9.1% during the same period. For the Middle East, rising oil price has enriched coffers. The Gulf Cooperation Council (GCC) countries earned about half a trillion dollars last year, mostly from oil and gas exports. They will be looking for investment opportunities in Singapore and the region. For the progressive Gulf States, they are seeking to diversify oil wealth and for Dubai, much professional expertise is required. Our neighbours around us have progressed. Vietnam's economy achieved 8.2% GDP growth and attracted US$10.2 billion of investments last year. This year it is expected to reach its GDP and Foreign Direct Investment (FDI) target of 8.5% and US$12 billion respectively. Despite its political problems, the Thai economy recorded 5% GDP growth last year. Similarly for Indonesia and Malaysia, their GDP growths were close to 6% last year. Both are expected to continue growing at about or over this rate in the next few years.
14. Why should Singapore benefit from the growth of Asia, more than others? Rich people buy what is trusted – the Mercedes, the Lexus. We will prosper because we have built brand equity. US President Bush said in his last visit, “Singapore's transformation from a small trading outpost to a confident and prosperous leader is the story of Asia.” Singapore today is, as he remarked, “one of the most vibrant economies in the entire world”. The former PM of India also marvelled at the “ability of our remarkable people to adapt successfully to the ever changing economic environment” which is “truly exemplary”. China is looking to cooperate with Singapore in the fields of science, technology, and human resources. Israel is keen to partner Singapore in developing long-term solutions for water and clean energy supply.
15. The Singapore premium is our great upside. Our companies have already established a presence globally. For example, RSP Architects which began in 1956 is now embarking on global municipal projects such as the I-Lan County Master Plan in Taiwan, the Ningbo Master Plan as well as the Fuzhou Changle International Airport in China. Next, Ascendas, our homegrown town planner, is one of Asia's largest developers of business, high-tech and industrial parks. It currently operates in the global markets of China, India, Japan and the Philippines. Keppel Corp is the world's top offshore oil drilling rigs maker; SembCorp Marine is globally renowned for its rig building and offshore conversion expertise
16. CEOs of local companies and MNCs tell me that Singaporeans are prized for certain assets and indeed much sought after. We are known for our diligence, integrity, loyalty and dependability. Sometimes they wish that we could be innovative, street-smart, more willing to take chances and cut corners. But at the same breath, they recognise that these added qualities would increase the chances of such employees stealing their business proposals and client base! That said, CEOs lament the difficulty of finding those wanting to make it big. They say - too secure, not hungry enough.
17. Our language capabilities and exposure to different cultures are recognised as an asset too. Singaporeans are known to be adaptable to different places and indeed CEOs want to send them abroad to expand their business. But Singaporeans readily admit, they are comfortable at home, they like the schools here for their children, and spouses prefer the social networks and leisure here. But things are changing and more Singaporeans are willing to spend a stint abroad as the Government facilitates their children's integration back into the educational system here.
Overseas Singaporeans – Helping Them Keep in Touch with Home
18. Today, there are over 150,000 Singaporeans estimated to be living, working and studying abroad. About 38% of Overseas Singaporeans are in their twenties. These young, bright, English-educated Singaporeans, including all of you present here, are highly mobile, versatile and adaptable. These qualities make you a talent of choice for global companies. Indeed, after your graduation, many of you will be highly sought after overseas and may decide to stay on. You may have to tussle with near-term personal aspirations to work overseas in top firms like Goldman Sachs, McKinsey or Google and a deeper desire to return and help shape the country's destiny and prosperity.
19. The Government has put in efforts to help Overseas Singaporeans stay engaged and connected back home. For example, the Singapore Day held in New York on 21 April this year brought thousands of Singaporeans together to meet and network, of course, while enjoying great Singaporean food! You may also have attended one of the Distinguished Business Leader Series where we bring our top corporate leaders to share their success formulas, business insights and personal stories with our Overseas Singaporean community. You may also be familiar with Contact Singapore, a global network that my Ministry runs to reach out to Overseas Singaporeans and other global talent who are interested to work in Singapore. Today, I am pleased to announce Contact Singapore's newly revamped website, which has many new, interactive features on the website, e.g. blogs, podcasts and live clips. The website also carries news on the latest industry trends and market movements in Singapore which you may wish to monitor when exploring your career potential in Singapore.
20. We want to create more platforms for Overseas Singaporeans to keep in touch with home. There are diverse needs, so we must provide multi-directional points of contact. They may be to strengthen networks among students or business links, or to update Overseas Singaporeans on happenings through YouTube or Contact Singapore, or just for fun and leisure. The Government and other agencies will facilitate but to succeed, the platforms must have meaningful outcomes and meet felt needs.
21. There have been positive results. A group of Singaporean art, music and design students in the UK proved so when they gathered to prepare for the 2005 Singapore Season in London. They found that they were able to share their personal and professional experiences in the UK, discuss the developments of the creative industries back home and build bonds with other like-minded individuals. In March 2006, the inaugural Singapore Creative Network UK was founded, with some help from Contact Singapore, to bring Singaporean students and professionals in the creative industries together for the first time. It is now a large, vibrant network, joined by representatives from diverse arenas ranging from theatre, music and dance to fashion, film, and architecture. I understand they have an upcoming event in August called the ”Singapore Wave” where they will be showcasing works from emerging young film-makers to a London-based audience. I applaud the students and professionals for their drive and passion to bring fellow creative Singaporeans together and in exporting Singapore culture overseas.
Threats
22. There might be some who wonder if the talk thus far has been too optimistic. They are right – as with every point in history, threats, even disruptive ones, do exist. Our growth in the 70's were against the threat of the spread of Communism and Communal tensions. Today, the recent events in London, Glasgow and Pakistan (Red Mosque) clearly tell us that the terrorist threat continues to exist. Communism, an ideology without God, took 50 years to be proven wrong and its apparatchik dismantled. Rising fundamentalism and terrorism are likely to take longer. With inter-connectivity, environmental issues will affect us all. We are reminded yearly of this fact by the haze. But more dangerous biological threats (SARS, avian flu, etc) can descend upon us precipitously.
23. Internally, we must guard against hubris and complacency. All of us recognise that Singapore is population-challenged. But the greater threat is to have closed minds – to new ideas, to think that we have arrived. If we fail to keep our relevance to the World or if we cannot defend our rights to maintain our way of life, then the slide down the slippery slope will happen in a blink of an eye.
Conclusion
24. The next 10 years or more for Singapore promise to be exciting times. There are new frontiers to conquer and fortunes to be made. My advice is complete your studies quickly, gain experience and competencies, stretch your boundaries but come back and be part of this adventure. Asia's growth will be unprecedented compared to the past half millennium. Singapore sits and has positioned herself strategically as one of nodes of heightened activity. There will be opportunities galore in diverse fields of Government, business and academia. Wherever you choose, we need bright minds, ready to forge ahead, undaunted by obstacles. Some of you can and will play a key role in shaping the future of this region.