MM Lee warns of dangers of slow growth if productivity
does not increase
Channel NewsAsia - Friday, February 19
SINGAPORE: The future
is promising for Singaporeans, but challenges such as increasing
productivity and raising skills across the board need to be tackled
in the next five years, Minister Mentor Lee Kuan Yew
said.
Mr Lee made the assessment at the Tanjong Pagar GRC’s Lunar New
Year dinner.
The Minister Mentor also said he expects Singapore’s economy to
grow between four and six per cent this year.
Speaking to residents in his constituency, Mr Lee said Singapore
has done well in the last five years. The island state has a
growing economy, increasing real incomes, better homes which are
rising in value, and citizens are generally better off.
To take advantage of the economic opportunities and make up for
low birth rates, Singapore had to increase its immigration. There
were also more foreigners working in Singapore on Work Permits,
S—passes and Employment Passes. These foreign workers contribute to
the country’s economic growth.
Mr Lee noted that in the past few months, the government has
taken further steps to widen the differentiation between citizens
and Permanent Residents, and to slow down the inflow of
foreigners.
However, he said Singaporeans must recognise that without
foreign workers in the construction, manufacturing and service
industries, many projects, such as the integrated resorts (IRs),
could not have been possible.
"These two IRs have increased jobs available, and will bring a
huge number of tourists and give a boost to our economy," the
Minister Mentor said.
"Foreign workers also built housing and infrastructure projects
like public transport, schools and hospitals all over Singapore.
Without them, these projects could not have proceeded and our
economy would slow down, to the detriment of Singaporeans."
Mr Lee explained that if Singapore wants to slow down the intake
of foreign workers and yet continue to prosper, local workers must
increase their productivity.
"Let me explain what happens when we make progress. HDB prices
go up, private home (prices) go up, all asset prices go up.
Everybody finds he owns something more valuable in the house, his
shares are worth more and he can live a good life," said Mr Lee.
"Of course we have to put up with more crowded trains, more crowded
buses, (but) it cannot be helped.
"Let me tell you what happens when we slow down too much. You
get the reverse spiral. Low growth, maybe even zero growth. Last
year we had minus two per cent. Prices go down, property prices go
down, incomes go down, you can’t refurbish your houses, no new
SERS, no upgrading and the country goes down.
"So between the two — growth against no growth, I am confident
we chose the right decision — growth, whatever the inconveniences
or competition for space, buses, MRTs, and even schools. But we
always give preference to our own citizens.
"Without growth, Singapore will not be what it is and the key to
our growth is a government taking right decisions and labour
unions, employers, and the government working together. No other
country in the world has got this combination."
"The same number of Singaporean workers must produce more by
getting better training, acquiring higher level of skills, working
smarter and making a collective effort as the Japanese do to make
their companies succeed.
"If we cannot increase the productivity or the output of our
citizens, our economy will slow down. We will have a deflating
economy, with a series of knock on effects as prices of all assets,
including flats will go down... demand will lessen, pay will fall
and so will the number of jobs and promotions."
Mr Lee added that when this happens, talented Singaporeans will
leave for greener pastures, which will lead to Singapore’s
decline.
"That is why the government decided in the past five years that
it was better to grow the economy and manage the accompanying
social pressures rather than slow down the economy. If our
neighbours grow and we stagnate, Singapore will face a very
different geo—political environment in the future."
Hence, to do well in the next five years, Mr Lee said that
Singaporeans must raise skills across the board, have more
enterprise innovation, and restructure the industries.
Every worker also has to be re—skilled, re—trained and
re—educated to achieve higher standards of capabilities.
Mr Lee said he believes a three—way partnership that involves
the government, unions and employers can achieve this.
In his Budget speech next Monday, Finance Minister Tharman
Shanmugaratnam is expected to elaborate on how Singapore plans to
tackle these issues, which have been highlighted by the Economic
Strategies Committee.
— CNA/yb