Recommendations and Strategies by the Economic Strategies Committee
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Economic Strategies Committee's key thrusts to take Singapore to the next level are realistic and achievable, says PM Lee
Anna Teo, Business Times 2 Feb 10;
(SINGAPORE) Allow market forces to weed out inefficient firms and make room for productive ones as the economy embarks on its next phase - one driven by skills, innovation and productivity, says the Economic Strategies Committee (ESC).
The shift to quality-driven growth - so as to achieve a quantum leap in productivity - calls for not only economic restructuring but also a major investment in people and capabilities across the board, the ESC says.
Formed in May 2009 to chart a new economic blueprint for Singapore, the 25-member panel headed by Finance Minister Tharman Shanmugaratnam submitted its proposals to the government over the weekend.
Wide-ranging recommendations from its eight sub-committees towards the overall goal of doubling annual productivity gains to 2-3 per cent over 10 years span seven strategic thrusts.
The ideas include using the foreign worker levy to manage Singapore's dependence on imported labour; going for high-value, complex manufacturing activities; growing a deeper base of globally competitive, mid-size local firms; and going underground to add to the island's land bank. As well, the ESC suggests that Singapore look into all energy sources - including the nuclear option - to become a 'smart energy economy'.
It also envisages a bustling new waterfront commercial and lifestyle hub - as big as Marina Bay - coming up at Tanjong Pagar in some 20 years' time.
'We must go beyond what we have developed, and do things differently,' said Mr Tharman in his letter to Prime Minister Lee Hsien Loong, along with the ESC report.
Or, as labour chief and Minister in the Prime Minister's Office Lim Swee Say, one of nine ministers in the ESC, put it at a media conference yesterday: The questions (about growth imperatives, for instance) may be the same today as before, but the answers required now must be different.
Responding to the ESC report yesterday, PM Lee described its proposals as 'realistic and achievable' and said the government accepts its key thrusts, and will give its views in the upcoming Budget speech and debate in Parliament.
Agreeing that Singapore must 'shift decisively' to foster growth through skills and innovation in its next phase of economic development, Mr Lee said this would require 'a major and sustained national effort'.
While the government will strongly support the transformation, businesses must themselves seek new ways to create value, he added.
'They must do this continually, and not imagine that a one-off effort will suffice. Our people must continue to upgrade their skills and deepen their expertise. This too must be relentless, as it is our only way to sustain growth and raise incomes,' Mr Lee said.
The ESC - which tapped diverse views from more than 1,000 people through its sub-committees - notes that there is significant room to improve productivity in every sector of the economy, especially when compared to other countries.
Mr Tharman believes the 2-3 per cent productivity growth goal - a one-third boost over 10 years - is achievable. But it will entail a comprehensive national effort, including 'investing in working adults throughout their careers'.
Just as critical is the need to restructure the economy and make room for 'more dynamic, more nimble' firms that will constantly be on the hunt for opportunities, or to consolidate or acquire other players.
The ESC sees a window of opportunity for Singapore firms to make their presence felt in Asia over the next five to 10 years - before other regional players catch up in skills.
One key plank of the ESC's strategies centres on the need to moderate the rapid growth of imported labour, which has been a big driver of Singapore's economic growth in the last decade.
Mr Tharman made clear that Singapore should, in the ESC's view, keep the pool of foreign workers at one-third of the workforce - but with better skills - while at the same time going all out to woo top talent here.
And the levy or price mechanism is 'the most efficient and flexible' way to manage the worker numbers, as it allows dynamic firms to seize immediate business opportunities without being constrained by 'rigid quotas or fixed allocations of foreign workers'.
The ESC's proposals were largely welcomed by the business community, even as analysts such as CIMB's Song Seng Wun found 'nothing unexpected' for an economy that's 'already a relatively well-oiled machine'.
The Singapore Business Federation said it will work closely with the ESC secretariat and other agencies to identify areas of tie-ups and resource needs, including grants, tax breaks and other initiatives, in support of the proposals.
For the ESC, the bottom line ultimately is income growth for Singaporeans. 'We believe the strategies we propose will help transform Singapore's economy once again, raise our citizens' living standards,' said Mr Tharman.
The big shift
High-powered panel tells what it will take to grow Singapore's economy and raise wages
# Higher productivity
# Improved skills
# More innovation
Ignatius Low & Sue-Ann Chia, Straits Times 2 Feb 10;
A BIG shift in the way Singapore grows its economy is on the cards after a high-powered economic committee submitted its blueprint for the future yesterday.
The changes will be wide-reaching, affecting everyone from employers to workers, but are considered necessary if Singapore is to make the next leap in its economic development.
The 25-member Economic Strategies Committee (ESC) said the country urgently needs to break out of its cycle of low productivity and build a highly skilled workforce and an innovative economy.
Productivity growth must rise to 2 per cent to 3 per cent annually from the dismal 1 per cent achieved in the last 10 years. For this to happen, workers' skills need upgrading, as in past productivity drives.
But the committee, made up of public and private sector chiefs, is pressing for far more fundamental change. It wants companies to change how they work, and rely more on technology and innovation to drive productivity gains.
The Government must help companies make the transition, it added, but foreign worker levies also need to go up.
This is necessary to stop employers taking the easy way out by simply adding cheap foreign workers to increase output.
'With the recovery from the crisis, the time is right to shift gears,' the panel said in its 46-page report. 'If we leave this till later, the pain of adjustments required will be greater.'
ESC chairman and Finance Minister Tharman Shanmugaratnam underlined the scale of the changes when he addressed a press briefing yesterday.
'Everyone has to play their part. The initiatives will have to take place on the national level, at the sectoral level, at the level of each enterprise and with each individual citizen,' he said.
'If we can raise productivity, we can raise incomes. We should aim to get into this virtuous cycle of better skills, better jobs, higher wages and incomes.'
The committee's call for change comes after almost 10 months of deliberations by eight sub-committees that canvassed views from about 1,100 people.
The committee was set up last May by Prime Minister Lee Hsien Loong as Singapore was going through its worst recession since independence.
It was asked to develop strategies for Singapore to maximise growth opportunities and make the best use of resources like land, labour and energy.
The committee responded with suggestions that ranged from the breathtaking vision of a new waterfront city at Tanjong Pagar to greater spending on R&D and a new export-import bank to help local businesses expand overseas.
Some of its more unusual suggestions created an immediate buzz - such as creating a subterranean land rights system for selling underground space and exploring the feasibility of nuclear power in Singapore.
More details on its various suggestions will be revealed this week. Yesterday, it was the focus on productivity and innovation that took centre stage.
Asked if the shift to higher productivity and wages would hurt the economy, especially in sectors much reliant on cheap foreign workers, labour chief Lim Swee Say was emphatic.
'There is no turning back,' he said. 'Growth may slow down, even in the near term, but it is worth taking the risk because not to take this risk of moving towards a productivity-driven strategy is going to be the biggest risk of all.'
He said the committee's proposals were 'good for the economy, good for the workers of Singapore'.
Turning to Mr Tharman, he said: 'We look forward to a bold and decisive announcement...at the Budget!'
Smiling, Mr Tharman promised: 'This is a major new phase in our economy, and the Government will want to be bold.'
The Government will respond when it lays out its Budget for the new year in about three weeks.
But PM Lee has already broadly accepted the new blueprint. In a letter to Mr Tharman, he agreed that the next phase of development requires a decisive shift in growth strategies.
Analysts welcomed the renewed focus on productivity, but some warned that a 3 per cent target is quite ambitious.
There should be 'substantial subsidies' to encourage automation, innovation and change, said economist Choy Keen Meng from Nanyang Technological University.
'It is not just going to happen slowly, but with a lot of help and prodding from the Government,' he noted.
The recommendations at a glance
Straits Times 2 Feb 10;
TO HELP Singapore increase its productivity and grow in a sustainable and inclusive way, the Economic Strategies Committee (ESC) released dozens of recommendations yesterday in a 46-page report that involved more than 1,100 people and took eight months to produce. Here are some of the key suggestions, which the ESC will elaborate on over the next few days.
Productivity-driven growth
# Raise foreign worker levies so that companies will rely less on cheap foreign labour
# A high-level national council will drive productivity efforts
# Have 240,000 workers doing Continuous Education and Training (CET) per year by 2015, up from 100,000 in 2008
# National Productivity Fund to give productivity grants to companies
# Tax rebates or grants for companies to invest in productivity
# Enhance Workfare to keep older workers in the workforce and encourage low-wage workers to upgrade their skills
# Develop 'T-shaped' professionals, managers, executives and technicians (PMETs) with both deep skills in their chosen area and broad skills across general fields
Global-Asia hub
# Position Singapore as a Global-Asia hub for global firms coming to Asia and Asian firms wanting to go global
# Keep manufacturing at 20 per cent to 25 per cent of the economy
# Make Singapore a leading consumer business centre
# Attract companies here to test urban innovations, such as the Electronic Road Pricing system
Diverse mix of companies
# Double number of small and medium-sized enterprises (SMEs) with revenues of over $100 million to 1,000 by 2020
# Export-import (Exim) bank to offer trade finance and project finance
# Government and private sector to start a growth fund of up to $1.5 billion to invest in growth-oriented SMEs in next 10 years
# Encourage mergers and acquisitions among SMEs and cooperation between multinationals and SMEs
More innovation
# Spend 3.5 per cent of gross domestic product on R&D by 2015, up from 3 per cent now
# 'Designed in Singapore' accreditation to emphasise design-driven innovation
# Centres of Innovation in polytechnics to help firms enter new growth areas
# Recruit faculty with entrepreneurial skills in universities to help develop innovation
Smart-energy economy
# Consider coal and electricity imports
# Study feasibility of nuclear energy
# Renewable energy to account for 5 per cent of peak demand in 2020
# Price energy to reflect real costs and constraints
# Study possible carbon pricing scheme
Better use of land
# Tanjong Pagar to be new waterfront city after 2027
# Study feasibility of consolidated port at Tuas
# Create new underground spaces with an underground master plan and subterranean land rights
# Intensify land use and make land zoning more flexible
Global city, endearing home
# Five world-class institutions or programmes by 2020 in new disciplines such as arts, fashion and sports sciences
# Affordable spaces for arts and design
# Host more high-profile international events
ESC proposes greater productivity and less dependence on foreign labour
Channel NewsAsia 1 Feb 10;
SINGAPORE: A high level committee has unveiled ambitious plans aimed at transforming Singapore's economy over the next decade.
The Economic Strategies Committee (ESC) on Monday offered several suggestions to make significant improvements in productivity in every sector of the country's economy so as to achieve productivity growth of two to three per cent a year over the next 10 years.
In its key recommendations to the government ahead of the Budget due on February 22, the ESC said that target will allow Singapore to grow its GDP by three to five per cent a year.
Productivity will therefore account for about two-thirds of the country's GDP growth, compared to just one-fifth in the past decade.
The priorities include boosting skills in every job, deepening corporate capabilities to seize opportunities in Asia and making Singapore a distinctive global city.
"Our assessment is that the next five to 10 years will provide greater opportunities for growth in the world around us than in any decade we have seen in the past," said chairman of the ESC, Tharman Shanmugaratnam.
"But at the same time we will also face greater constraints than we have had in the past. In particular, because of a slow-growing workforce; and over time too, because we'll have run up against the limits of our land."
He went on to say: "It will require a change in how we work, how we create value, and it will require that our companies expand overseas to make the most of opportunities that match their strengths."
The 25-member ESC, which took about eight months to come up with its comprehensive report, also recommended the setting up of a high-level national council to boost productivity, as well as a National Productivity Fund. The fund will provide grants to support initiatives to raise productivity.
At the same time, the committee also felt there is a need to expand the Continuing Training and Education scheme at all levels. The committee projects that at least 240,000 people will undergo the programme each year by 2015.
"We achieved one per cent in the last decade, we can achieve two to three per cent in the next decade. If we can raise productivity, we can raise income. We can raise incomes, adjusted for inflation, real incomes," said Mr Tharman.
According to the ESC chairman, through the moves, Singapore can grow individual workers' incomes, and in particular, focus on productivity, skills and innovation in each enterprise.
He added that it is the best way in which Singapore can ensure that those in the lower end of the skills band as well as those in the lower end of the income band can move up and it is the best way to ensure growth is inclusive in Singapore.
The ESC went on to recommend that Singapore manage its dependence on foreign workers, suggesting that levies on foreign workers be raised progressively, although it did not give a quantum for this.
Foreign workers now make up about a third of the total workforce. The committee said Singapore cannot increase the number of foreigner workers as liberally as it has done over the last decade due to "physical" and "social limits".
It said that being less dependent on such workers will also incentivise companies to improve productivity.
Nonetheless, the ESC recognises that it is critical for Singapore to continue attracting highly capable and entrepreneurial people from around the world to work here.
The proposed changes to the foreign worker levies should include greater differentiation between the skilled and the unskilled worker.
On the business front, sweeping measures to anchor Singapore as a Global-Asia Hub and strategies to build a vibrant and diverse corporate ecosystem were put forward.
While manufacturing remained a key sector, making up to 25 per cent of the economy, there is also a strong push to build Singapore into a trusted financial services hub and leading consumer business centre.
Companies in Singapore - big and small, local and foreign - should also form strong networks so they are inter-dependent on one another, the ESC recommended.
The target is to grow 1,000 Singapore enterprises with revenues of over S$100 million by 2020.
Innovation will also be driven by R&D and raise Singapore's gross expenditure in the area to 3.5 per cent of GDP by 2015. This will put Singapore on the level with developed countries like Finland, Sweden and Japan.
Also proposed are public-private co-investment funds of up to S$1.5 billion in the next ten years for growth-oriented SMEs based in Singapore.
The government will now review the recommendations of the ESC and it is expected to respond to the proposals during the Budget debate later in February.
- CNA
Economic Strategies Committee unveils ambitious plans for Singapore's economic transformation
Mustafa Shafawi, Lin Jiamei and Hoe Yeen Nie
Today Online 1 Feb 10;
A high-level committee has unveiled ambitious plans aimed at transforming Singapore's economy over the next decade.
Top most on the Economic Strategies Committee (ESC) report is to make significant improvements in productivity in every sector of the country's economy.
The target - achieve productivity growth of two to three per cent a year over the next 10 years.
That will allow Singapore to grow its GDP by three to five per cent a year.
Productivity will therefore account for about two-thirds of the country's GDP growth, compared to just one-fifth in the past decade.
Three priorities have been laid out:
One, boosting skills in every job; two, deepening corporate capabilities to seize opportunities in Asia and three, making Singapore a distinctive global city.
Chairman of the Economic Strategies Committee, Mr Tharman Shanmugaratnam told a news conference Monday morning: "Our assessment is that the next 5 to 10 years will provide greater opportunities for growth in the world around us than any decade we have seen in the past... But at the same time we will also face greater constraints than we have had in the past. In particular, because of a slow-growing workforce; and over time too, because we'll have run up against the limits of our land. .. It will require a change in how we work, how we create value. And it will require that our companies expand overseas to make the most of opportunities that match their strengths."
More than just laying out a vision, the committee has outlined broad strategies to ensure targets are met.
In upping productivity, the ESC has recommended the setting up of a high-level national council as well as a National Productivity Fund to support the efforts.
The council will oversee and drive the efforts while the fund will provide grants to support initiatives aimed at raising productivity levels.
At the same time, there is also a need to expand the Continuing Training and Education scheme at all levels.
The committee projects that at least 240,000 people will undergo the programme each year by 2015.
Mr Tharman who is also Finance Minister explained: "In 10 years time, we want productivity for our economy as a whole to be one-third higher than where it is today and this can be achieved because we are capable of a major national effort. We are capable of doing this consistently, in a concerted fashion, with everyone playing their part - government, unions, businesses, individuals playing their part."
The minister added that if Singapore can raise productitivy, income can also be raised.
There's also a call to manage Singapore's dependence on foreign workers.
The committee suggests that levies on foreign workers be raised progressively, although it did not give a quantum for this.
Foreign workers now make up about a third of the total workforce.
The ESC says Singapore cannot increase the number of foreign workers as liberally as it has done over the last decade due to "physical" and "social limits".
It says being less dependent on such workers will also incentivise companies to improve productivity.
Nonetheless, the ESC recognises that it's critical for Singapore to continue attracting highly capable and entrepreneurial people from around the world to work here.
The proposed changes to the foreign worker levies should include greater differentiation between the skilled and the unskilled worker.
On the business front - there'll be sweeping measures to anchor Singapore as a Global-Asia Hub and strategies to build a vibrant and diverse corporate ecosystem.
Manufacturing will however remain a key sector - making up to 25 per cent of the economy.
But there's also a strong push to build Singapore into a trusted financial services hub and leading consumer business centre.
Companies in Singapore big and small, local and foreign should also form strong networks so they're inter-dependent on one another.
The target is to grow 1,000 Singapore enterprises with revenues of over $100 million by 2020.
Innovation will also be driven by R&D.
The recommendation is to raise Singapore's gross expenditure on R&D to 3.5 per cent of GDP by 2015, putting Singapore on the level of developed countries like Finland, Sweden and Japan.
Also proposed, public-private co-investment funds of up to $1.5 billion in the next 10 years for growth-oriented SMEs based in Singapore.
Given Singapore's limited resources, there's also extensive recommendations to ensure energy sustainability and land use is fully optimised.
Among the plans - a new waterfront city at Tanjong Pagar, currently a port area comprising Keppel and Pulau Brani. The current port lease in the area expires in 2027.
The land area is similar in size to Marina Bay and the committee believes it can potentuially allow for a substantial expansion of the business district, integrated with waterfront housing, hotels and other lifestyle attractions.
The committee says there's also a need for an underground masterplan.
The Government should catalyse the development of underground space over the next decade, as well meet the need to develop subterranean land rights, a valuation framework and to establish a national geology office.
Besides land constraints, Singapore also faces energy resource constraints.
One suggestion is for Singapore to study the feasibility of using nuclear energy in the long term. It's an idea which Prime Minister Lee Hsien Loong in 2008 said he "hasn't ruled out".
The ESC says the option could help meet base load electricity demand as well as Singapore's energy security in the long run.
In the medium term, the committee suggests that Singapore should explore coal and electricity imports to diversify its energy sources.
Importing energy will also free up valuable land in the country.
The 25-member ESC took about eight months to come up with its comprehensive report.
The next step is for the Government to review the recommendations.
It's expected to respond to the proposals during the Budget debate later this month.
ESC spells out broad strategies to raise innovation & productivity
Imelda Saad, Channel NewsAsia 1 Feb 10;
SINGAPORE: The government's Economic Strategies Committee (ESC) has released its report aimed at ensuring long-term growth for Singapore, spelling out broad strategies to raise innovation and productivity.
It said that average productivity growth of 2 per cent to 3 per cent per year can be achieved over the next decade, adding that achieving such a productivity rate would allow gross domestic product to grow by between 3 per cent and 5 per cent per year in that period.
"Productivity will, therefore, account for about two-thirds of our GDP growth, compared to just one-fifth in the last decade," the committee said in its recommendations report released on Monday.
The committee, chaired by Finance Minister Tharman Shanmugaratnam, listed seven strategies to boost productivity through a range of initiatives. These include growing skills and innovation initiatives, bolstering the manufacturing sector and nurturing large enterprises.
With better skills comes better jobs and therefore higher wages, just like the case at "Muthu's Curry".
There is more to just good fish head curry at "Muthu's Curry" in Little India. Since 2006, wait staff at the restaurant have been carrying PDAs that allow for direct orders to the kitchen.
Aisvaryam, the company that runs "Muthu's Curry", forked out about S$90,000 for this wireless system, but said it's worth the investment.
The system has helped to reduce errors and speed up operating workflow. The easy operating workflow and training allowed the company to hire non-Indian and first-time service staff.
Moving forward, Aisvaryam is also developing standard procedures for recipes to cut down reliance on Indian chefs and enable it to hire non-Indian chefs.
To ensure consistency and quality of food, and reduce the need for skilled manpower, Aisvaryam is setting up a central kitchen at FoodXchange for its marination and sauce preparation.
It is working with the Food Innovation & Resource Centre (FIRC) - a SPRING Singapore-Singapore Polytechnic initiative for local enterprises - to upgrade its packaging capabilities in preparation for its franchising expansion and to protect their intellectual properties.
Visvanaath A, CEO of Aisvaryam's Fine Foods Pte Ltd, said: "With the introduction of PDAs, my staff efficiency has increased by 50 per cent, which means faster turnaround for my customers, which (means) more revenue for my company. As a result, my company is able to increase our staff wages by 10 to 15 per cent."
The ESC said Singapore has a lot of untapped potential to increase productivity in every sector of the economy.
In absolute levels, Singapore's productivity in manufacturing and services is only 55 and 65 per cent of that in the US and Japan.
In the retail sector, the country's average level of productivity is about 75
per cent of that in Hong Kong and one-third that of the US.
In construction, productivity level is half of the US and one-third that of Japan.
The committee has suggested setting up a high-level national council, as well as a National Productivity Fund, to drive efforts to boost productivity. To match this, Continuing Education and Training will be expanded to get 240,000 Singaporeans to raise their skills by 2015.
The committee said lifelong learning must become an integral part of society. For lower wage workers, one way is to enhance the Workfare Income Supplement (WIS) scheme to provide stronger incentives for older workers to stay employed and get more training.
The committee said the WIS introduced in 2007 has succeeded in raising incomes and encouraging low wage workers to work.
Another aspect of getting companies to invest in productivity is to reduce the reliance on foreign workers. Hence, the proposal is to raise foreign worker levies progressively.
NTUC Secretary-General, Lim Swee Say, said: "The last 10 years, one reason why we achieve only 1 per cent productivity (growth) was because some sectors in the Singapore economy did not do their job!
"We had sectors in Singapore that registered negative productivity growth in the last 10 years. That's why the labour movement feels very strongly that this time round, we must make sure that every sector of the economy (makes significant improvements in productivity).
"(This is especially so for) the lower-productivity, the lower-skilled sectors, which traditionally, because they were not subjected to global competition, they always look for easier way out to solve their problem, always run to the Ministry of Manpower to ask for more foreign workers."
"Foreign workers are good, but too many foreign workers growing at too fast a rate is no good for the economy because it dilutes our focus on productivity," added Mr Lim.
The government is expected to give details when it responds to the ESC report during the Budget debate later in February.
Innovation is of course a key driver of productivity and that is where research and development comes in. The committee has recommended that Singapore raise its gross expenditure on R&D to 3.5 per cent of GDP by 2015.
That will put Singapore on the level of developed countries like Sweden, Finland and Japan.
One way is to expand centres of innovation in polytechnics to provide local companies with technological help so they can enter growth areas like medical technology and clean energy.
Another is to introduce design thinking programmes in schools to nurture a next generation of creative Singaporeans.
The committee said the recommendations spelled out in the report will give Singapore the opportunity to invest in its people and restructure the economy. How successful Singapore will be in implementing the strategies will require a national effort across all sectors.
- CNA/ir
Singapore: The business world's launch pad
Robin Chan, Straits Times 2 Feb 10;
SINGAPORE can fashion itself as a regional pivot point where international companies looking to Asia for growth can base themselves, while Asian firms expanding out of their own countries can tap on the country's economic muscle.
Besides this 'Global-Asia hub' idea, Singapore must also be a key base for high-value manufacturing and international services, said the report from the Economic Strategies Committee (ESC).
'We can do this by building on our physical and cultural connectivity to Asia and the world,' it said.
The Global-Asia hub idea is one of seven key strategies to grow the economy. At the core is getting multinationals and Asian firms to use Singapore to launch operations across Asia and the globe.
This strategy is in line with what the Economic Development Board has been pushing in its 'host-to-home' concept. The head of the sub-committee is EDB chairman Leo Yip.
The report also emphasised that manufacturing, long a key part of the economy, will remain a vital cog. It said Singapore should retain a globally competitive manufacturing sector at between 20 and 25 per cent of the economy.
'High-value and complex manufacturing generates good jobs with diverse skill requirements, provides opportunities for constant upgrading and stimulates demand for sophisticated services,' it said.
What will set Singapore apart is its continual movement into more complex manufacturing, where knowledge and intellectual property are valued. This could be in nutriceuticals or difficult cross-disciplinary areas like bioelectronics.
Manufacturing will also bring related services such as head office operations, research and development and intellectual property management.
But developing services, which makes up about 70 per cent of the economy, is also important. Singapore should continue to grow as a financial and business centre, building on its strengths in risk management and trading and asset management, among others, as well as services such as accounting, law and consultation.
Physical trading activity should also be further integrated with related services such as trade finance and supply chain management.
The report said Singapore 'should capitalise on our cultural affinity with the region, and develop Singapore into the pan-Asian location of choice'.
Mr Phillip Overmyer, chief executive of the Singapore International Chamber of Commerce and a member of the ESC sub-committee, said: 'Western markets are softening because of the recession and Asian markets are growing.
'And the kinds of products and services Asian markets want on a broad scale are not the same as what the United States wants or what Europe wants.'
A brave new growth path
Tough journey ahead, but it'll be worth it to achieve higher incomes
Fiona Chan, Straits Times 2 Feb 10;
WHEN history looks back on the Economic Strategies Committee (ESC) years from now, it will remember one key thing out of the dozens of recommendations.
The high-level committee will go down in the books for marking a pivotal shift in the Government's economic thinking: The point at which Singapore stopped pursuing 'growth at all costs' in favour of seeking 'quality growth'.
In practical terms, this means slowing the flow of what has seemed like an endless stream of cheap foreign labour. Instead, Singapore must raise the quality and productivity of each local and foreign worker - as well as each company, each sq ft of land and each unit of energy.
Economists have been debating this issue on and off for years, trying to decide whether Singapore's productivity is rising or falling, which measure of productivity to use and whether it matters at all.
Put simply, productivity measures the efficiency of production. It looks at the value of output produced by each unit of input, usually people, capital or land.
The most commonly used measure is labour productivity, which can be derived by taking total gross domestic product (GDP) divided by the total number of hours worked in the period.
But there are other ways to look at productivity too. Fifteen years ago, Nobel Prize-winning Princeton economist Paul Krugman caused a mild sensation by warning that while Singapore's headline growth numbers were impressive, its total factor productivity - the efficiency with which people, capital and land are combined to produce goods and services - was among the lowest in the world.
Growth here, he said, was driven not by each input producing more output, but simply by increasing the number of inputs: Enlarging the labour force through immigration and pouring more money into business investments.
This would not be a problem, except that this sort of growth must eventually slow down due to diminishing marginal returns.
Other notable economists, including University of Michigan professor Linda Lim, have decried Singapore's 'growth fetishism' and suggested that more thought be put into whether this growth is 'good', and who it benefits.
Various studies by universities and banks have drawn different conclusions. For every one that shows declining productivity, another concludes otherwise.
Throughout all this, the Government's stand has been quite clear.
It has sent the message that while productivity is a desirable and essential goal, a small, open economy with no natural resources such as Singapore's has to take growth wherever it can be found and not be too picky about where it comes from.
Why, then, the mindset change now?
When things were going well in the boom years leading to 2008, the question of Singapore's productivity was put on the back burner.
But since the financial crisis, the discussion over where Singapore's growth is coming from has been reignited and become more heated, with the recent surge in foreign workers adding fuel to the fire.
Between 2004 and 2007, the economy expanded at fiery rate of 8.2 per cent a year. But this was driven by a deluge of foreign workers and foreign capital, while productivity grew a mere 1 per cent per year in the last decade.
The population jumped by 20 per cent between 2003 and 2008, led by a near 60 per cent increase in foreigners, according to Citigroup economist Kit Wei Zheng.
Foreigners now make up a third of the labour force, from only a quarter just four years previously. They contribute almost half of the GDP, up from one-third a decade ago.
The flood of foreign workers willing to work on the cheap has also been blamed for depressing the wages of low-income locals and widening the income gap.
Apart from the economic ramifications, the rise in the number of foreigners has caused considerable social and political discomfort, which analysts say may have been the key catalyst for this change in policy.
Singaporeans have become alarmed at the number of foreigners within their midst, crowding public transport and forming enclaves in housing estates. This has helped prompt the Government to tighten the tap on foreign workers and precipitate the next stage of growth.
The shift in thinking demonstrates not only a recognition of the unsustainability of Singapore's previous growth model, but also a brave step towards a fundamental change in the economy.
Growth through cheap labour has been an 'easy route', as Professor Lim has said. Restructuring the economy and retraining local workers to increase productivity will be a more difficult journey.
Economists have already identified key risks in the path to higher productivity.
First, reducing the inflow of foreign workers and cheap labour means growth rates will have to fall, they say.
The ESC indicated in its report that Singapore's medium-term growth will average 3 per cent to 5 per cent per year over the next decade. Prior to this, Singapore's trend growth was set at 4 per cent to 6 per cent.
Labour chief Lim Swee Say, however, offered a different take on this. Whatever the risks of switching to productivity-driven growth, the risks of not doing so are higher as the current growth path is unsustainable, he said.
A second immediate result of the economic paradigm shift is a rise in costs.
As Singapore allows in fewer low-wage foreign workers, companies will have to switch to higher-skilled and pricier foreign workers, pay more for local workers or invest in more machinery.
The biggest victim of this is likely to be the construction industry, which is reliant on cheap foreign labour. As construction costs rise, so may property prices.
Third, not all companies will survive the fallout. Those which find themselves unable to survive without cheap workers because they are too weak or uncompetitive will be forced to relocate, shut down or merge with other companies.
There is also the risk that reducing foreign workers will just lead to lower total output, rather than increased productivity. This is where the other measures to train workers must come in.
Restructuring an economy is always an uncertain exercise, especially one as complex as Singapore's.
There will be ups and downs, and twists and turns, in this test. But when the ultimate aim is higher incomes for all, the challenge should be worth undertaking.
Some key recommendations
Teo Xuanwei Today Online 2 Feb 10;
To become Asia's most liveable city
- Boost vibrancy in areas with unique heritage and character, eg Bras Basah-Bugis, Orchard Road, Singapore River; decentralise economic activities, eg to Jurong Lake District, Paya Lebar
- Invest in cutting-edge sustainable development strategies/technologies, to build highly-liveable precincts eg Punggol, Marina Bay
- Attract more top-notch international events eg in sports, arts, music, cuisine, fashion
To become leading cultural capital in Asia
- Rejuvenate the Civic District with stronger programming, marketing and linkages between cultural institutions; encourage original, innovative art forms and entertainment content
- Let out vacant state-owned properties as affordable space for budding creative enterprises
To attract and nurture diverse pools of talent
- House five world-class institutions or programmes by 2020 in new disciplines eg the arts, design, sports
Uma Shankari, Business Times 2 Feb 10;
SINGAPORE needs to diversify its energy sources over the next decade - and even consider nuclear power - as it will face energy constraints while growing, said the Economic Strategies Committee (ESC) yesterday.
The committee, helmed by Finance Minister Tharman Shanmugaratnam, said that Singapore must become resilient, sustainable and innovative in its energy use. This will include studying the feasibility of nuclear energy, he pointed out. 'As a small, resource-constrained country, we have to ensure that energy does not become a limiting barrier for Singapore's economic competitiveness and growth,' said the ESC report. 'We also have to play our part in reducing carbon emissions as a responsible member of the global community.'
Singapore needs to find a balance between economic competitiveness and environmental sustainability and, at the same time, ensure that its energy supply is secure, said S Iswaran, Senior Minister of State at the Ministry of Trade and Industry. He co-chaired the sub-committee tasked with looking at Singapore's energy resilience and sustainable growth.
The ESC said that Singapore should diversify its energy sources. In the medium term, Singapore should explore coal and electricity imports to diversify both fuel types as well as source countries. 'The import of electricity is an option which can free up valuable land in Singapore,' said the report. 'It could also allow us to tap on the significant renewable energy potential in our region, such as in the form of hydro-electricity or geothermal power.'
For the long term, Singapore should support innovation and investment in renewable energy and study the feasibility of nuclear energy, the report added. 'Advances in nuclear technology will make it much safer than earlier designs, and we should carefully study its viability for a small city-state like Singapore.'
Early investment in critical energy infrastructure was also called for. Singapore should also step up measures to promote energy efficiency for buildings, industry and in homes and support low-carbon solutions in transportation, the report said.
It also called for energy to be priced to reflect its total cost - taking into account various externalities and constraints such as energy security and environmental sustainability.
Industry players should welcome the diversification of energy sources, said Jen Kwong Hwa, managing director of Micron Semiconductor Asia. He was also the co-chair of the sub-committee together with Mr Iswaran.
Mr Jen also said that competition could potentially drive down the cost of energy. And while prices could go up if the government prices energy to reflect its total cost, this should not affect businesses, Mr Jen added. This is because Singapore is likely to only adopt such a measure if there is a global agreement in place. 'What businesses look for is a level playing field,' Mr Jen noted. 'If everyone in the world is asked to pay for externalities, then our costs will not be high compared to them.'
Singapore 'should consider nuclear energy'
Grace Chua, Straits Times 2 Feb 10;
SINGAPORE should consider nuclear energy in the long term as a way of meeting its energy needs.
That radical idea has come from the Economic Strategies Committee (ESC), which has suggested various ways to reduce the economy's reliance on oil and gas.
In the short to medium term, the committee has suggested that Singapore look into generating energy from coal and even importing electricity from neighbouring countries.
But in the long term, the feasibility of nuclear energy should be examined.
'Advances in nuclear technology will make it much safer than earlier designs, and we should carefully study its viability for a small city-state like Singapore,' said the committee's report.
Expanding on this at a press conference yesterday, Mr S. Iswaran, Senior Minister of State for Trade and Industry and Education, said there is a need to consider alternative fuels because global energy markets are getting tighter, especially for traditional fossil fuels.
'That, together with economic cycles, means that we are looking at energy prices that are volatile and most probably on an upward long-term trend,' he said.
'The recommendation is basically that Singapore should start to study this seriously because we need to understand the context, the safety requirements, implications and other dimensions of this with a view to a long-term possibility.'
Climate change has made low carbon emission energy sources like nuclear power more attractive around the world.
But the ESC's suggestion still created a buzz here, where experts have previously raised concerns about Singapore's small physical size.
Siting a nuclear plant would be problematic as nuclear reactors need to be ringed with a buffer zone for safety.
Assistant Professor T.S. Gopi Rethinaraj of the National University of Singapore's (NUS) Lee Kuan Yew School of Public Policy said that even though nuclear power today is safe, it still generates radioactive waste.
'Singapore would need to get a larger country to take back the fuel,' he said.
But countries such as the United States and India are looking into the less-hazardous thorium as a nuclear fuel, reported Wired Magazine's January issue. But the technology required for thorium is more expensive than that for uranium, Dr Rethinaraj noted.
Nanyang Technological University (NTU) economics researcher Chang Youngho warned that the high capital cost of a nuclear reactor also means nuclear power would cost more to produce - about 10 cents to 15 cents per kilowatt hour compared to 5 cents to 6 cents for coal or oil.
Currently, Singapore generates its own electricity, more than 80 per cent of which comes from natural gas piped from Indonesia and Malaysia. Other sources such as fuel oil, diesel and waste incineration make up the remainder.
Importing coal is one diversification option, said the report. Last November, power company Tuas Power began building a $2 billion coal and biomass power plant on Jurong Island.
Coal could be imported from Indonesia and Australia, said NTU's Dr Chang.
But Singapore would have to study if coal was feasible, where to site a coal-fired plant and what sort of plant it should be. Pollutants such as sulphur dioxide and nitrogen oxide would also have to be controlled, he said.
The other option of importing electricity could mean tapping the region's renewable energy capacity, such as geothermal power from countries like Indonesia or hydroelectric power from the Mekong region.
Such plans are already on the cards: Since 1992, the South-East Asian nations of Asean have been planning a regional power grid project to share electricity, and Singapore and Malaysia already have a shared electricity power line for times of emergency.
But this has taken a long time because of the region's fragmented politics and lack of infrastructure, said NUS' Dr Rethinaraj.
'Singapore would have to invest in that infrastructure knowing there could be uncertainties,' he said.
Adjust energy prices to show true costs
Straits Times 2 Feb 10;
ENERGY prices need to be adjusted to reflect their true costs and constraints, said the Economic Strategies Committee (ESC) report yesterday.
These costs, such as carbon emissions and energy security, will result in higher energy prices. But higher prices could promote the use of and investment in low-carbon solutions, noted the committee's report.
On the flip side, Singapore should also step up measures - such as energy audits and smart grids - to increase energy efficiency and help households and companies conserve energy.
'The Government should study how best to implement a carbon pricing scheme in anticipation of future carbon constraints, should there be a global agreement on climate change,' the report said.
Carbon pricing, it added, should be calibrated and introduced gradually, with help for low-income households to offset the costs.
If a legally binding climate deal had been made at the Copenhagen summit last year, developed countries would likely be subject to restrictions on emissions. Putting a price on carbon emissions is one way of helping countries meet these restrictions.
In fact, some European states such as Finland, Denmark and Sweden already have carbon taxes, while the European Union also has its own emissions trading scheme.
Singapore has said it would cut emissions by up to 11 per cent by 2020, and will commit to a 16 per cent cut when a legally binding global agreement is reached.
So pricing energy correctly - to reflect the carbon emissions generated from burning and extracting fuels - would be an incentive for companies and households to be more energy-efficient.
Dr Chang Youngho, assistant professor of economics at the Nanyang Technological University and an adjunct senior fellow at the National University of Singapore's Energy Studies Institute, said a carbon price of say $42 a tonne would raise the price of electricity by about 2 cents per kilowatt hour if the electricity was generated using natural gas.
'If you impose a carbon tax, it needs to be revenue-neutral - to be returned to the consumer in some way,' he said.
For instance, he suggested, the revenue from a carbon tax could be invested in developing energy efficiency or recycling schemes.
Already, Singapore is investing in energy efficiency and other sustainable development schemes.
It has committed $100 million since April last year to improve the energy efficiency of existing buildings, $43 million to implement cycling infrastructure in some HDB towns, and $31 million to test-bed solar technology.
In the ESC's report, two strategies were suggested: promoting energy efficiency for buildings, companies and homes through schemes such as energy audits; and using low-carbon public and private transportation.
For example, electric and hybrid cars and those using compressed natural gas are already eligible for a green vehicle rebate of 40 per cent of their open market value till December 2011.
GRACE CHUA
Singapore government studying possibility of adopting nuclear energy in future
Hoe Yeen Nie, Channel NewsAsia 1 Feb 10;
SINGAPORE: The Singapore government is not ruling out the nuclear energy option as a way to diversify its energy sources beyond oil and gas.
Senior Minister of State for Trade and Industy, S Iswaran, said Singapore needs to study the requirements needed for nuclear energy and whether they are feasible in the country's context.
He added that other economies are also moving in this direction.
Other alternatives suggested by the Economic Strategies Committee (ESC) include importing electricity and coal in the medium term, and setting price incentives to increase energy efficiency.
- CNA/ir
Powering up to a smart energy economy
Esther Ng, Today Online 2 Feb 10;
SINGAPORE - Businesses and consumers could pay more for energy if the recommendation to price energy to reflect its "total cost" is adopted by the Government.
This is just one of the recommendations by the Economic Strategies Committee (ESC), which asked for "various externalities such as energy security and environmental sustainability" to be factored into cost pricing.
"Appropriate price signals could both promote the use of, as well as encourage investments in, energy-efficient and low-carbon solutions," it said.
The aim: To achieve a smart energy economy for Singapore, both to ensure that energy does not become a limiting barrier for competitiveness and to have the Republic play its part in reducing carbon emissions "as a responsible member of the global community".
When contacted, businesses MediaCorp spoke to were seemingly unfazed by a possible price increase.
"It's nothing new, the prices of raw materials and oil have been going up over years," said Mr Sunny Koh, managing director of Chinatown Food Corporation, a frozen food products company.
"There's nothing much you can do if you're a retail consumer," said Mr Ong Teck Soon, chief executive of Abecha and Sesami Singapore. The small IT company's annual electricity bill is some $6,000 to $7,000, mainly from its two data centres.
However, energy-efficiency consultant, Dr Lal Jayamaha of LJ Energy, believes the price signals will encourage companies to invest in energy efficient solutions.
"They stand to benefit from such investments in terms of higher savings especially if the energy cost is high," he said.
Mr Koh, who is also deputy chairman of the Singapore Packaging Agreement, agreed: "Reducing packaging means less cost in logistics, warehousing and freighting, all this will help reduce the energy bill."
Dr Jayamaha said there should be fiscal incentives - in the form of "lower tariffs" - to reward companies and individuals who are energy-efficient.
Besides pricing, a medium term goal should to diversify energy sources, said the committee, which recommended that Singapore explore coal and electricity imports. "The import of electricity is an option which can free up valuable land in Singapore," said the ESC. This would allow Singapore to tap on the significant renewable energy potential in the region, such as hydro-electricity or geothermal power.
On this, Dr Jayamaha said he expects the cost of doing so to be "similar to what we're paying for now".
While the cost of electricity from a hydro-plant in the region could be low, the infrastructure of importing electricity - laying cables - is high, he said.
The jury is still out whether clean coal technologies is as energy efficient as it claims to be, he added.
Other recommendations include: Establishing Intelligent Energy Systems for retailers and households to make informed choices on their electricity consumption; investing in a liquefied natural gas terminal, which will not only allow Singapore to gain access to global gas markets, but also reduce the cost of electricity; and developing Jurong Island as an energy-optimised industrial cluster.
This includes recycling waste heat from industry to desalinate sea water, and using the desalinated water for cooling industrial processes.
Nuclear energy an option?
Today Online 2 Feb 10;
In Singapore's bid to diversify its energy sources, going nuclear is a feasibility that should be studied, said the Economic Strategies Committee (ESC).
Calling it a "possible option" to meet "baseload electricity demand, as well as energy security imperatives", the ESC said advances in nuclear technology are also "making it much safer than earlier designs".
Senior Minister of State for Trade and Industry, Mr S Iswaran, noted that there are "significant developments in the sector itself, whether it's design or the plants, the modularity of plants ... the safety footprint ... (and) the type of fuels being used". Adding that other economies are also moving in this direction, Mr Iswaran said there are "good reasons" why Singapore shouldn't rule it out. In fact, he said Singapore should be "proactive in understanding what it entails and what capabilities are required, and at the same time, whether it is suitable in our context". Currently in Asia, only China, Japan, South Korea and India have nuclear reactors in operation. Esther Ng
Underground land banks, Tanjong Pagar waterfront district on the cards
Emilyn Yap, Business Times 2 Feb 10;
SINGAPORE's physical landscape looks set to undergo big changes some 10 to 20 years down the road - Tanjong Pagar could become a new bustling waterfront district after the port moves, and land banks could be created underground.
These are just two of several possible developments, following recommendations from the Economic Strategies Committee (ESC) to improve Singapore's land productivity. ESC also proposed that the government support more intensive use of industrial land, more flexible use of land where needed, and offer more business locations.
'Our land use strategies and infrastructure will support ESC's new economic strategies, in particular to make Singapore a better place not just to work but also for Singaporeans to live and play,' said Senior Minister of State for National Development and Education Grace Fu yesterday. She is also co-chair of the sub-committee looking at higher land productivity for future growth.
One suggestion poised to create buzz is the redevelopment of port land at Tanjong Pagar, Keppel and Pulau Brani to create a new waterfront district. This could happen after the port's lease at terminals expire in 2027.
Comparable in size to Marina Bay, the area would allow the business district to grow and could accommodate homes, hotels and other recreational facilities. 'We are quite excited about the potential,' Ms Fu said. 'What form it will take is something that we will work on but of course it has to be relevant to the time when we will be developing it . . . We are not looking at developing it anytime soon.'
The ESC also recommended that the government study the feasibility of having a consolidated port at Tuas, as part of Concept Plan 2011.
According to Real Estate Developers Association of Singapore CEO Steven Choo, discussions on relocating the port in Tanjong Pagar have been going on for some time. While the suggestion is not new, 'I think it is certainly very good timing,' he said.
It is too soon to predict the proposal's impact on developers, he added. 'When you see some of these ideas translated to the concept plan and then cascaded down to the master plan provisions, then I think it becomes clearer.'
Market watchers have been anticipating the remaking of Tanjong Pagar for some time, said DTZ executive director Ong Choon Fah, pointing out that it 'makes sense' to consolidate ports where the land cost is not so expensive.
Besides recycling land, the government can also create new space. ESC suggested that it add to its land bank by creating basement space at the same time that it develops underground infrastructure such as rail networks. 'We are limited in terms of land, but I think we are not limited in terms of imagination and creativity,' Ms Fu noted.
ESC also proposed that the government develop a subterranean land rights and valuation framework, establish a national geology office and draw up an underground master plan so that spaces above and under ground are 'synergised'. There should also be investment in research and development on creating subterranean space.
The government has ventured into underground projects in the last few years. Construction of the Jurong Rock Cavern, an oil storage facility below the seabed, is ongoing. JTC Corporation is also embarking on soil and rock investigations at Kent Ridge for the possible creation of an underground science city.
In addition, ESC raised the need for the government to step up the rejuvenation of mature industrial estates, and intensify the use of existing industrial land. It could offer incentives and grants to encourage the private sector to pioneer innovative plant layouts which would minimise land take-up.
In this respect, JTC has been working on several new concepts for factories. One involves the use of a giant hoist to move bulky goods even to high floors, allowing developers to build taller facilities with smaller footprints.
Colliers International industrial director Tan Boon Leong suggested that the government could take the lead in building prototypes for innovative facilities. 'If it proves to be successful, then everyone would want to go for it,' he said.
ESC also proposed that the government study targeted ways to widen land use flexibility. This would be useful as lines between certain business activities blur.
DTZ's Mrs Ong supported this recommendation. The use of industrial space has changed in the last few years and more knowledge-based activities are taking place there, she observed. Some companies also like to co-locate various functions, such as R&D and sales, she added.
ESC further noted that there should be greater choice and diversity in business locations for various types of companies. For instance, the government can provide incubator spaces for SMEs and start-ups and new estates for industries.
ESC proposes new waterfront city, nuclear energy
Joanne Chan/Lin JiaMei, Channel NewsAsia 1 Feb 10;
SINGAPORE: The Economic Strategies Committee (ESC) on Monday gave extensive recommendations to ensure energy sustainability and the full optimisation of Singapore's land space, given the island-state's limited resources.
Among the plans is a new waterfront city at Tanjong Pagar, currently a port area comprising Keppel and Pulau Brani. The current port lease in the area expires in 2027.
The land area is similar in size to Marina Bay and the committee believes it can potentially allow for a substantial expansion of the business district, integrated with waterfront housing, hotels and other lifestyle attractions.
Grace Fu, Senior Minister of State for National Development and co-chair of ESC Sub-committee On Land, said: "This piece of land, I think will give us lots of elements to work on. We're quite excited about the potential. It is large, it is well-located, so we believe that it offers us opportunities to create economic, social, recreational, tourism opportunities."
The committee said there is also a need for an underground master plan. It said the government should catalyse the development of underground space over the next decade. The committee also emphasized a need to develop subterranean land rights, a valuation framework and to establish a national geology office.
Ms Fu said: "The government can take the lead by creating basement spaces, in conjunction with new infrastructure development. We can create land bank, underground land bank, especially around our rail system. Also, we'd like to develop an underground masterplan to ensure that underground and above ground are synergised and optimised."
The "hard" infrastructure aside, there is also a strong push for Singapore to provide the best quality of life in Asia. And this involves growing the arts and entertainment scene by developing economically and socially vibrant districts, such as Bugis.
Lui Tuck Yew, Acting Information, Communications & Arts Minister and co-chair of ESC Sub-Committee On Global City, said: "Singapore features very well on the global competitiveness indices, as a place to do business, as a place for the economy to grow and so on.
"Where, I think, we have room to improve further, is actually on the softer issues, the softer aspects - the cultural areas, the arts - as well as to make this place an even more liveable city."
Mr Lui said Singapore should develop by 2020 at least five world-class institutions in diverse fields such as arts, design and fashion.
Besides land constraints, Singapore also faces energy resource constraints. The committee suggested that Singapore study the feasibility of using nuclear energy in the long term, an idea which Prime Minister Lee Hsien Loong in 2008 said he "hasn't ruled out".
The ESC said the option could help meet base load electricity demand as well as Singapore's energy security in the long run.
In the medium term, the committee suggested Singapore should explore coal and electricity imports to diversify its energy sources. Importing energy will also free up valuable land in the country.
- CNA/yb/ir
Focus on providing best quality of life over next decade
Uma Shankari, Business Times 2 Feb 10;
SINGAPORE should aim to provide the best quality of life in Asia over the next 10 years as it looks to become a distinctive global city.
It should also become a leading cultural capital and attract and nurture a diverse pool of talent, the Economic Strategies Committee (ESC) said yesterday when releasing its report.
Singapore's ability to grow and succeed will ultimately depend on the talent and drive of its people, said Lui Tuck Yew, Acting Minister for Information, Communications and the Arts.
'Singapore features very well on the global competitiveness indices as a place to do business, as a place for economic growth,' he said. 'Where I think we have room to improve is actually the softer aspects, such as culture and the arts, as well as making this place an even more liveable city.'
RAdm Lui co-chaired the sub-committee that was tasked with coming up with proposals to make Singapore a leading global city.
Among other suggestions, the ESC report calls on the government to invest in 'cutting-edge' sustainable development strategies, technologies, and research and development projects to create distinct eco-precincts.
Singapore should also develop new urban planning solutions to expand the range of districts offering different lifestyle options - as has been done at Punggol, the Jurong Lake District and Marina Bay.
The report said that such strategies could be carried out collaboratively with private-sector players to develop new expertise in architecture, engineering and building design that could become a competitive advantage for companies bidding to develop new cities in Asia.
The report also said that Singapore has to come up with an expanded and well integrated public transport system through the Land Transport Masterplan. 'This is a major investment that will improve Singapore's convenience and connectivity.'
Economic activity has to be decentralised across the island through the creation of new commercial nodes outside the Central Area to ease congestion in the central business district and bring jobs closer to homes, the ESC said.
The report also suggests developing economically and socially vibrant districts in Bras Basah-Bugis, Orchard Road, Singapore River and conserved historic areas.
Home, the place we want to be
Ansley Ng, Today Online 2 Feb 10;
SINGAPORE - It is a vision more than a decade in the making. And in its latest update, the Republic's "global city" masterplan features grand new developments and the most rounded perspective yet.
From a new waterfront city at Tanjong Pagar and eco-townships, to hosting "pinnacle global events" and nurturing professional expertise among corporate leaders and fashion designers alike - these are ways to make this a place where people want to be, according to the Economic Strategies Committee (ESC).
The panel, significantly, went beyond the hard economics of workforce upgrading and corporate development, to highlight the idea of a "distinctive global city and endearing home" as a third broad priority for the next decade.
"Why should liveability, culture and the arts feature so prominently?" Acting Minister for Information, Communications and the Arts Lui Tuck Yew asked rhetorically.
Singapore, he continued, has done "very well" in global surveys as a place to do business in. But "there is room to improve further on the softer issues like the cultural areas, the arts, as well as to make this an even more liveable city," added Mr Lui, who chairs the sub-committee on becoming a leading global city.
The goal, said the ESC, is to continue attracting top talent from around the world, and to get Singaporeans who venture abroad to stay emotionally attached to their homeland.
In this respect, the fundamental aims have not altered much, though the vision has gained more dimension over the years. In 1997, then-Prime Minister Goh Chok Tong urged Singaporeans to welcome foreign talent, saying this "must become a cosmopolitan, global city ... where people from many lands can feel at home".
A 2000 report outlined the strategies to turn Singapore into a "global arts city" - "one of the top cities in the world to live, work and play in", with a climate "conducive to creative and knowledge-based industries and talent".
In more recent years, the focus has also turned to shaping a liveable, sustainable city; while last year, the Republic made it to the top 10 of Forbes' list of culture capitals, alongside the likes of Glasgow and Barcelona.
And in its report released yesterday, the ESC noted that with 35 per cent of the resident workforce projected to hold a degree by 2020, a new "talent ecosystem" and more opportunities for people to develop "thought leadership" must be in place. Simply being a meeting point for enterprise, talent, cultures and ideas, it added, "will be a source of competitiveness and growth in its own right" for Singapore.
Are Singaporeans ready for the next stage of evolution as a global city?
Dr Terence Chong of the Institute of Southeast Asian Studies said: "If it's for the upper and middle classes, then it is well and good. (But) there are also many Singaporeans who do not consume the arts or F1 races, or do not see the economic benefits of it. These people may not be so enthusiastic." What is needed is more arts education, he said, while aknowledging the outreach the National Arts Council was doing.
But heartlanders will reap many tangible benefits of the global city, from living in a place with the "best quality of life in Asia" - in Mr Lui's words - to having jobs closer to home as commercial hubs are decentralised. Added Mr Lui: "Top companies will bring a range of jobs and opportunities available to Singaporeans to stretch their potential and connect with international talent worldwide."
Network of underground cities, linked by rail
Teo Xuanwei, Today Online 2 Feb 10;
SINGAPORE - In the not-too-distant future, Singapore could have a network of underground cities, possibly linked by rail.
This was one of the Economic Strategies Committee's (ESC) recommendations - that investment be pumped into the development of underground space over the next decade - as the Government continues to find ways around the problem of space limitations in land-scarce Singapore.
The aim is to add to the Republic's "land bank" as demand for space increases in tandem with economic growth, Senior Minister of State (National Development) Grace Fu said at a press conference yesterday.
"Just as Singapore has reclaimed land in advance to support economic growth in the past, our sub-committee recommends that the government acts early to catalyse the development of underground space," said Ms Fu, who co-chairs the ESC sub-committee tasked to study land productivity.
An underground masterplan should be developed to ensure that space-use above and below ground are "synergised" and "better integrated" with surrounding developments, such as the rail network.
It also recommended the setting up of a national geology office to collate underground information, and setting up a subterranean legal and valuation framework.
The recommendation was welcomed by National University of Singapore geography professor David Higgitt, who described geology as a "neglected discipline" due to the island's limited natural resources.
"However, a national geology office is an important component of plans to develop underground space and a vital complement to structural engineering," he told MediaCorp.
"The geology of Singapore is complex and rock conditions can vary markedly over short distances. Understanding the controls on these variations and their implications for development is a necessary step."
In other recommendations, the committee said that industrial land, which takes up a "significant percentage" of Singapore's land stock, should be used more intensely or recycled.
For instance, the Government could incentivise private manufacturing firms to design more efficient plant layouts through grants, said Ms Fu.
Mature industrial estates should also be diverted for use by "higher value-added activities", similar to how companies such as Hyflux and Caterpillar are based at Kallang and Jalan Tukang now.
To support the ESC's new macro-economic strategies, urban-planning in the next 10 to 20 years will have to factor in making Singapore "the best home for businesses and people", she added.
The former can look forward to integrated locations, which facilitate whole value chain activities. For example, promising SMEs will be housed at suitable "incubator" spaces that support development.
As for workers, the sub-committee suggested distributing economic activities across the island so that jobs are found closer to homes.
This way, people can enjoy a better quality of life, said Ms Fu.
Tg Pagar set to be next waterfront city
Jessica Cheam, Straits Times 2 Feb 10;
EVEN as Singapore's iconic Marina Bay nears completion, its next waterfront city has been identified: Tanjong Pagar.
Right now, it is home to cranes and rows of stacked containers waiting to be loaded onto ships calling at one of the world's busiest ports.
But come 2027, when port operator PSA Corporation's lease on the land expires, the prime waterfront space should become home to skyscrapers of another sort.
The Economic Strategies Committee (ESC) yesterday called for Tanjong Pagar to be transformed into a waterfront city catering for the expansion of Singapore's business district and boasting apartments, hotels, and lifestyle and tourism facilities.
'This area is very attractive, it is just at the fringe of the city, the size is comparable to another Marina Bay and it can offer immense opportunities to support future growth,' said Senior Minister of State for National Development Grace Fu yesterday.
Because of its proximity to the Central Business District, Sentosa and universities, Tanjong Pagar 'will give us lots of elements to work on and we're quite excited about the potential', she added.
However, details are not ready at the moment as the Government is not looking at developing it any time soon.
Ms Fu, who co-chaired the ESC sub-committee on higher land productivity for future growth, said this is all part of the committee's push to make the most productive use of Singapore's land.
This is especially since Singapore's competitiveness will in future rest on being 'a global city and a meeting point in Asia for enterprise, talent, cultures and ideas'.
The idea is make each piece of land work harder and examine how land use should be reconfigured to support the new economic strategies for the country.
For example, more incentives and grants could be given to encourage the private sector to pilot innovative plant layouts for key manufacturing sectors to minimise the use of land, she said.
'We will also have to progressively step up the rejuvenation of mature industrial estates and at the more macro level... recycle land to support new economic activities,' she added.
Another look may also be taken at industrial spaces which one cannot imagine could be used for other purposes.
Lorong Halus, for example, used to be just a dumping ground for rubbish, but is now home to wildlife.
'So we would try not to imagine Tuas as it is now, but rather a place where we could find a congregation of not just economic (or) industrial activities but hopefully residential and recreational as well - a much more pleasant place and a place for the birds as well!' Ms Fu quipped.
'We are limited in terms of land but I think we are not limited in terms of imagination and creativity.'
Commenting on the plans for Tanjong Pagar, Mr Steven Choo, chief executive of the Real Estate Developers' Association of Singapore, said they will add a new dimension to land-scarce Singapore.
However, he also noted that this is a long-term vision which will not have much impact on the current market over the next few years.
'But eventually I'm sure it will open up more options, more quality living, offices, accommodation, and more variety to our urban landscape,' he said.
Singapore Institute of Architects president Ashvinkumar Kantilal said the plans were 'very pragmatic, typical of the Singapore approach'.
The location already boasts Sentosa, residential estates, and a shopping and office hub, and will present a great planning opportunity 'when the time comes', he added.
Need more space? Let's go underground
Straits Times 2 Feb 10;
ONE innovative solution to meeting the nation's expected shortage of land is to go underground and carve out spaces.
These subterranean land banks would be located mainly near transport hubs, according to the Economic Strategies Committee (ESC) report yesterday.
As Singapore plans ahead for a city that 'remains extremely liveable even as we grow, we have to make more efficient use of our land (and)... this will call for bold and imaginative urban planning and redevelopment', said the report.
Senior Minister of State for National Development Grace Fu expanded on the idea yesterday, saying that the Government has to identify new industrial estates to serve new industries.
It could create basement spaces with new underground infrastructure, and land banks around our rail network, said Ms Fu, who co-chairs the ESC sub-committee on land.
She said the Government has found 'tremendous potential for us to create infrastructure underground already' during the process of developing the rail system.
'This means that there's land that can be created underground. We may not need to tap (it) any time soon but if we're to do it, as we are developing the infrastructure underground, it's getting the land ready for us,' she said.
The Government also wants to develop a masterplan to ensure that underground and ground spaces are developed in sync with each other to ensure that the maximum potential is realised. It is setting up the National Geology Office to collate information on underground development.
The Government will also develop a subterranean legal and valuation framework that will benefit private and public sector efforts in developing underground spaces, added Ms Fu.
Investment will be pumped into research and development and cavern level test beds to gain experience in underground development.
Going underground is not alien to Singapore. The industrial developer and landlord, JTC Corporation, has started work on the first phase of the Jurong Rock Cavern, the first underground oil storage facility to be built in South-east Asia.
Industry observers said yesterday that going underground is challenging from a cost viewpoint.
Mr Ashvinkumar Kantilal, president of the Singapore Institute of Architects, said developers only go into basements when required because of the cost.
'The uses of these underground spaces also have to be very specific,' he said.
Perhaps a leap in technology will lower costs to allow Singapore to maximise the potential of such spaces, he added.
JESSICA CHEAM
Tanjong PAGAR - waterfront city
by Teo Xuanwei, Today Online 2 Feb 10;
Singapore could eventually have a new waterfront city to add to the crown jewel it now has in Marina Bay.
That is, if the Government takes up the Economic Strategies Committee's recommendation to redevelop the port at Tanjong Pagar into a business district - complete with waterfront housing, hotels, lifestyle and tourism uses - when the lease expires in 2027.
The "prime land" currently occupied by the Tanjong Pagar, Keppel and Pulau Brani port terminals, which is comparable to the size of Marina Bay, "can offer immense opportunities to support future growth", said Senior Minister of State (National Development) Grace Fu.
The ESC is suggesting that under the Concept Plan 2011, the Government studies the feasibility of eventually consolidating all port activities at Tuas. This will reap greater economies of scale both in terms of land use and port operations, said the sub-committee on enhancing land productivity.
Architect Tay Kheng Soon agreed with the suggestion. He told MediaCorp that "the time has come" to move the Tanjong Pagar port. But he was less sure about plans to construct a new waterfront city.
"Right now, you have a lot of trucks coming through the business district because of the port, so we should move the port away and free up the land," said Mr Tay, Akitek Tenggara's principal partner.
But whether a new waterfront city or the expansion of the Tuas port should go ahead should be studied closer.
"This limitless expansion of residential properties is all premised on a growth economy. Is it absolutely sure the economy is going to grow? If not, then we better start re-thinking fundamentally," he said.
Asha Popatlal, Channel NewsAsia 1 Feb 10;
SINGAPORE: Red plate cars are becoming red-hot from this year. Exactly one week after a revised scheme kicked in, 184 motorists have converted their normal cars to the off-peak car scheme.
That's more conversions in one week than in all of 2007 or 2008.
From last Monday, motorists who opt for an off-peak car get two main incentives.
They can now drive extended hours - all day Saturday instead of just half a day previously as well as on the eves of five public holidays.
In addition, those who convert their normal cars receive S$1,100 cash rebate for every six months their cars remain off-peak vehicles.
Some car dealers said they have seen an increase in interest, with about 20 per cent more queries about buying off-peak cars, especially in the small car categories. But they added it is still too early to say how much of this interest will convert into actual sales.
Eventually, transport authorities hope to see the current percentage of off-peak cars, which stands at eight per cent, to go up to a possible 10 per cent of the total car population.
But market watchers said there is a price to be paid for the latest incentives. The new scheme is not compulsory for those who have been on the off-peak car scheme all along.
Motorists who convert from the existing off-peak scheme will receive a smaller road tax discount, down from S$800 to S$500.
That could be why among those who have been on the off-peak car scheme all along, only about 32 per cent have proceeded to convert to the new scheme, according to the latest data from the Land Transport Authority. - CNA/vm
Red number plates turn into sizzling-hot thing
Asha Popatlal Today Online 2 Feb 10;
SINGAPORE - Cars with red number plates are now sizzling hot, it appears.
One week after a revised scheme kicked in, 184 motorists have converted their normal cars to the off-peak car scheme.
The move is tantamount to more conversions in one week than in all of 2007 and 2008, when 168 car owners did so, and only slightly lower than 232, the figure for all of last year.
The new scheme allows off peak cars to be used all day on Saturday, instead of just for half a day previously, as well as on the eves of five public holidays.
Motorists who convert to red plates receive a $1,100 cash rebate for every six months their cars remain off-peak vehicles.
Some car dealers say there has been an increase in interest - with about 20 per cent more queries about buying off-peak vehicles - especially in the small-car categories.
However, they say it is still too early to tell how much of this interest will convert into sales.
Eventually, the transport authorities hope to see the current percentage of off-peak cars, which now stands at 8 per cent, go up to 10 per cent of the total car population.
However, the new scheme is not compulsory for those who have been on the off-peak car scheme.
Motorists choosing to convert from the existing scheme to the new one will see their road-tax discount drop from $800 now to $500.
That could be the reason why only about 32 per cent (15,243 out of 47,224 such motorists) have converted to the new scheme, according to the latest data from the Land Transport Authority.
Northern "Biopirates" Gobbling up Resources
Stephen Leahy, IPS News 1 Feb 10;
PARIS, Feb 1, 2010 (IPS) - Rich countries are like biopirates, looting far-away lands for food, raw materials and cheap labour. They're plundering other richer ecosystems because they've largely destroyed their own. And they're blocking global efforts to create an independent scientific assessment panel that is likely point the finger at the real reason species are going extinct at 1,000 times their natural pace, experts say.
European politicians were "shocked" to learn that just 17 percent of Europe's ecosystems were in decent shape, Dominique Richard of the European Environmental Agency told participants on the final day of the U.N.-hosted Biodiversity Science Policy Conference in Paris.
"We've just completed our first complete assessment of the state of biodiversity in Europe and the results really shocked policymakers," said Richard, a European biodiversity expert.
Most of Europe's natural systems that provide essential services like food, clean air and water, climate regulation and so on have been in decline for years. But no one in Europe really notices.
That's because the rich are "geosphere people" who help themselves to nature's ecological services anywhere in the world, said Ashok Khosla, an eminent Indian environmentalist and founder of the Delhi-based Development Alternatives Group, who was representing the International Union for Conservation of Nature.
The poor, on the other hand, are "ecosystem people" who depend directly on local resources for their livelihoods, Khosla told delegates. The ecosystem people cannot afford to get their food or water elsewhere, so if they degrade their own ecosystems, they suffer the direct consequences.
That's the main reason the regions with greatest amounts of biodiversity - where nature is richest and least degraded - are the lands that indigenous people control, said Victoria Tauli-Corpuz, chair of the United Nations Permanent Forum on Indigenous Issues.
"While indigenous people live in areas with the richest biodiversity, we are still the poorest of the poor," said Tauli-Corpuz.
The current economic system does not value nature or nature's services, said Khosla. "A tree is a capital asset worth far more than its value as lumber. But we simply don't know how to fully value a tree or a forest."
Recent estimates have set "nature's annual worth" at several times the current global economy, he notes. Reforming the economic system will take time, but meanwhile, valuable natural assets are being lost.
One major initiative to slow this rate of loss is to finally put in place an authoritative organisation similar to the Intergovernmental Panel on Climate Change (IPCC) for biodiversity this year during the U.N. International Year of Biodiversity.
Many policy decisions, even green ones, are made without regard to impacts on biodiversity, said Anne Larigauderie, executive director of the Paris-based DIVERSITAS.
For example, government policies that encourage and subsidise the use of biofuels and biomass energy to reduce carbon emissions have largely gone forward with little investigation into the potential impacts on ecosystems.
"Institutions, government and the public perception have a fragmented view of the world, and these are the indirect drivers of biodiversity loss," Larigauderie said at the conference.
Since 2005, Larigauderie and others have been trying to get governments to create an Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) - an IPCC-like organisation for biodiversity. There is no global mechanism that pulls all information about ecosystems and their current status together, and analyses it for decision making.
The key function of such a panel is to bridge the enormous divide between biodiversity science and policy and be able to provide science-based guidelines for policy makers, said Larigauderie.
"Governments from 95 countries were at the last negotiating meeting and we're hoping there IPBES will be launched in October of this year," she said.
October is when the 193 countries that have signed the Convention on Biological Diversity have their biannual Convention of the Parties, where they will seek a binding agreement on targets to curb biodiversity loss over the next 10 years.
"We need a serious intergovernmental panel like IPCC, a panel with teeth and a solid mandate," said Khosla. However, it took too long for the IPCC to get started and produce relevant information, he cautioned.
Indigenous people support the IPBES concept but want to be sure that they and their traditional knowledge are involved. "We've been fighting to prevent exploitation and destruction of nature. We can help and do a lot but we need support, additional resources to do it," said Tauli-Corpuz.
Poor countries are also asking for capacity-building support so that they can assess the status of their natural systems and understand the threats. Such countries simply don't have the expertise or resources, but help from the rich countries has not been forthcoming, reported Larigauderie. And that reality may compromise or scuttle the hope of an effective biodiversity panel.
"Rich countries are not interested in paying for capacity building," she said.
Biodiversity is not a major priority for governments of rich countries, noted Khosla. And so the "geosphere people" (or biopirates) of the North will continue to plunder the natural wealth of South without the detailed knowledge of the damage being done.
"In the end we need to change mindsets, values and ethics," he said.
Hilary Chiew, The Star 2 Feb 10;
PETALING JAYA: Animal welfare groups have called on the public not to support the use of tigers for profit on the pretext of celebrating the approaching lunar year of the tiger.
The groups, both in Malaysia and Singapore, denounced such events as cruel to the animal and doing little for the conservation of the species.
Singapore-based Animal Concerns Research and Education Society said the use of tigers, or any other wild animal, as photography props brings with it a whole host of welfare concerns.
“Big cats used in photography sessions are often kept in extremely small cages between sessions, unable to act on their natural instincts and hardly able to move,” its director of education, Amy Corrigan, said in an e-mail yesterday.
“Cubs may be taken away from their mothers at a young age specifically to be used for photography sessions, which is distressing for both mother and cubs.
“Adult big cats have been known to be drugged and have their teeth and claws removed, which of course raise serious welfare concerns. Tigers have also been beaten to make them pose.”
She was responding to an article on tigers being featured as attractions at theme parks and private zoos.
The society urged Singaporeans travelling to Malaysia to refrain from having their photographs taken with captive tigers whether in a zoo or other establishments.
Selangor Society for the Prevention of Cruelty Against Animals said while it appreciated the Chinese custom for symbolism, it appealed to the public to put animal welfare concerns first.
“An animal is not for the entertainment of humans. It would be more meaningful if people could channel their adoration for the animal towards conservation efforts. Make a donation to tiger conservation instead.
“Malaysia is blessed with this magnificent creature, but it is facing extinction. Let’s show the world that Malaysians are a caring lot by doing the right thing this Chinese New Year,” said its chairman Christine Chin, who also warned that agitated tigers could be dangerous to the public.
A theme park and a private zoo announced last week that it would be allowing photography and petting sessions with tiger cubs between Feb 14 and Feb 24.
The Star’s citizen blog had registered a number of entries from readers who were appalled at the small enclosures that the tigers at the zoo were kept in.
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