Japan and South Korea adopt green plans to save economy but Singapore unlikely to follow suit
Jessica Cheam, Straits Times 19 Jan 09;
RESCUE packages for ailing Asian economies are increasingly taking on a green hue, with Japan and South Korea being the latest to announce 'Green New Deal' policies to boost growth.
While market watchers feel Singapore could introduce similar measures, analysts say Singapore's Budget this week will more likely focus on domestic issues such as help for struggling businesses and households.
The green stimulus concept has been promoted recently by the United Nations Environment Programme (UNEP) as an antidote to current economic woes.
It has urged governments to formulate fiscal policies and make investments designed to spur green growth and thereby create new jobs.
Such programmes also set the framework for a leaner, low-carbon, better-managed global economy, the UNEP has argued.
South Korea recently announced it will invest over US$38 billion (S$56 billion) in environmental projects to help stimulate its flagging economy and create 960,000 new jobs over the next four years - with 140,000 to be realised by the end of this year.
The Japanese government, similarly, has vowed to create one million new jobs through green infrastructure initiatives.
Its green sector currently employs 1.4 million people and generates sales of US$745 billion. This is expected to grow as its Environment Ministry said it will accelerate the development of the sector, bringing forward a 2020 target to create a green business sector worth US$1 trillion and employing 2.2 million people.
With the North Asian giants taking the green economic policy route, should Singapore follow suit? Does the green sector have what it takes to pull Singapore's economy out of recession?
Economists whom The Straits Times spoke to say Singapore's focus in the short term is likely to remain on helping flagging businesses and struggling households.
'I don't think the green sector is developing on a big scale at this point,' said UOB economist Ho Woei Chen.
OCBC economist Selena Ling felt that green fiscal policies, if any, will be a 'very long-term thing' and not an immediate priority for the upcoming Budget.
'The attention really will be helping businesses and households cope with the current economic situation,' she said.
Singapore Environment Council (SEC) executive director Howard Shaw said that although Singapore's green industry efforts may not be branded under the 'Green New Deal' banner, it has, in recent years, introduced such policies to help green the economy's infrastructure.
Incentives for green buildings, for example, have been launched to help building owners convert their assets to become more energy-efficient.
A check with the Economic Development Board (EDB) revealed that the Government has dedicated more than $600 million to the green sector so far.
This includes $350 million set aside in 2007 for clean energy research and a $330 million fund approved in 2006 for environmental and water technologies.
More plans are in the works but details cannot be released yet, said EDB.
It pointed out that the clean technologies industry had been identified as a strategic economic growth area since 2006, 'way before the financial crisis'.
'Today, we still believe in bright, long-term prospects for the global clean-tech industry...the sum will go towards developing manpower, R&D and grooming Singapore-based clean-tech enterprises - all of which are key pillars in the clean-tech industry,' said EDB.
This green sector has created more than 3,000 jobs so far, and the goal remains for the clean energy industry to contribute $1.7 billion to economic output and create 7,000 jobs by 2015, EDB said.
Mr Shaw argued that more could be done to boost the green sector.
Policies today are entrenched in research and development investment at the moment, he said.
The funds committed to greening the economy remain 'relatively small', perhaps a 'reflection of Singapore's cautious approach before committing to pump X dollars to get X number of jobs', he said.
Credit Suisse economist Joseph Tan also feels more can be done.
The solar industry, for example, could benefit from direct fiscal stimulus, and grow to be a booming sector that generates growth and creates jobs. But this will take time, he concedes.
Meanwhile, the Energy Market Authority (EMA) maintains that clean energy options 'do not have the scale to replace more than a small proportion of our energy needs'.
However, 'the energy landscape is rapidly evolving and we should not write off any energy option for Singapore', it said.
EMA has also recently embarked on a project to test-bed clean and renewable technologies on Pulau Ubin.
SEC's Mr Shaw is hopeful. 'In future years, I hope we will continue upping the stakes in this industry.'
Green industry creates jobs in Singapore
# Norwegian solar firm, Renewable Energy Corporation: $6.3 billion plant, 150 hired, another 900 this year, and by next year, aims to employ 3,000.
# Finland biofuel firm, Neste Oil: $1.18 billion plant, 100 jobs by next year.
# Copenhagen-listed wind firm, Vestas Wind Systems: $500 million plant, 300 jobs by 2012.
# Swiss solar equipment-maker Oerlikon Solar: $39 million R&D centre, 100 jobs.
# Solar wafer-maker NorSun: $419 million plant, 300 jobs.
