What can other governments learn from Singapore’s pandemic policies
It implemented measures to support businesses including covering 75% of the employees’ wages.
Singapore–an economy that is reliant on global trade–has managed to survive the pandemic on the back of fiscal policies implemented during the pandemic such as job support and wage growth schemes. For the Lion City to ensure economic growth, it has to ensure stability to attract talent and investments from abroad.
YCP Solidiance Director Anil Rai noted that at the onset of the pandemic, the Singapore government issued four budgets in a fiscal year containing policies that assist Singaporeans to prevent them from forcibly retrenching employees. In some deeply affected sectors, the government shouldered up to 75% of the employees’ salaries.
“Doing that, Singapore got out of the tracks pretty early, with a population that was relatively more highly employed than the others in the region,” Rai told GovMedia.
In real estate, Rai said the government had to step in and “calm the markets down.” The government has imposed new cooling measures, tightening the maximum loan limits for housing loans due to rising interest rates, which took effect on 30 September.
Technological investments have also gained support from the government through equity shares or capital expenditures that enabled companies to be “at the edge of the curve” in technological advancements.
“Singapore has done well despite the challenges of the supply chain that we face today because of multiple single points of failure that are being addressed globally,” he said citing inflationary prices as one of the challenges the country faces, but is controlled through monetary policies.
“I would expect for us to continue on this path, that there will be continued efforts not only in investments but in the monitoring of the socio-economic and political situation, especially when you compare Singapore to its neighbours, both in the Indian Ocean as well as the South China Sea,” he added.
The evolution of the business sector, however, has been “laggard” and they have to reduce reliance on import labour, especially those that “add little value” to a product or service, and instead continue investments in automation.
Keeping businesses’ ground running
Another challenge Singapore has to face is attracting talent from abroad due to its very narrow base of talent. However, Singapore is not alone in this fight as some markets are also facing the same dilemma rooted in low birth rates like Hong Kong.
“For Singapore and Hong Kong, markets that are developed, urbanized, have a low pool of local resources to depend upon, and even within that pool, they might not actually find the right person for the right job, it becomes critical that we are attractive to people who can do the job in a variety of industries,” Rai said.
“This attraction of talent becomes the salient seminal issue of the day. The country [should be] able to present itself as the most desirable location for investments, for businesses and for leading minds around the world,” he added.
Singapore launched a new five-year Overseas Networks & Expertise Pass for those earning a fixed monthly salary of S$30,000 and above, allowing holders to concurrently work for multiple companies. The application will open on 1 January 2023.
Hong Kong, meanwhile, will launch a two-year visa for graduates of the top 100 universities globally who earned at least HK$2.5m.
Digitalisation will also play a crucial role for businesses such as the integration of the internet-of-things and 5G, particularly in the manufacturing industry. Rai said that the application of machine learning in the processes of the industry can reduce human error and increase productivity.
The services sector would also need to follow suit as well, otherwise, they will be left behind in the new normal.
“Anything that can be optimised will eventually be required to be smarter than it was before,” he said.
Need for stability
Whilst Singapore is expected to continue playing its role as a trading hub and emporium that connects Eastern and Western markets, Rai said the Lion will also lead the shift in the trends in the management of the supply chain and logistics.
“There is a significant investment in that space in Singapore But I think the private sector and government can do more in addressing some of the problems that the world at large faces because of our experience in that space,” he said.
As an environment of uncertainty remains, it is crucial for the country to gain stability to further boost the economy, he said.
Rai says that any market that can demonstrate a “modicum of certainty in an otherwise uncertain environment” will be able to attract talent, investment, and companies as they make decisions based on their perceptions of risk and stability.
“Any country that can present a ground that is certain and stable would be setting itself up for success for the next 20 to 30 years,” Rai concluded.