Khwaish Oct 2015

Speaking Softly!
Can Singapore Survive?
Mr Malminderjit Singh
Singapore’s 50th anniversary presents
an opportunity to all of us to reflect
on the nation’s past tribulations and
achievements. While we revel in the
undoubted economic miracle that
Singapore has come to be, it is opportune
to also consider Singapore’s future,
which inevitably leads to the often ask
apocalyptic question – Can Singapore
survive?
I was recently asked to give my thoughts
on this topic at a youth symposium and
I thought it useful to also share some of
these perspectives with our readers to
kindle some thoughts on the existential
future of Singapore.
Back to the question – “Can Singapore
Survive?” Singapore is unique in the sense
that it has served all of three functions – a
city with vibrant economic opportunities
while being a sovereign state and a young
nation with common values, ideals and
aspirations.
It appears unlikely to me that Singapore’s
sovereign existence will be under any
real threat in the future, if present
circumstances remain. With a strong
defence as a deterrent, Singapore’s place
and relations in the global networks also
strengthen its sovereign position.
However, that could change and we
should not take these factors for granted.
For one, defence spending in Southeast
Asia is the fastest in the world. According
to a McKinsey report, Southeast Asia was
the world’s second largest import market
for defence between 1997 and 2012.
While much of this may be to replace
ageing fleets, we cannot discount that
we have also seen a corresponding rise in
aggression in the region. Naval aggression
is one way in which this ambitious
aggression has manifested, especially
with Indonesia in recent times blowing up
foreign illegal fishing boats in dramatic
fashion and splashing reports and pictures
of these attacks all over their media in a
bid to flex their muscles.
In this respect, Singapore’s position in
global networks or its military deterrence’s
ability to act as a protective layer for
the country will depend on a number of
factors. Let me focus on two, which, in my
view are critical.
The first is economics. There are
hindrances to Singapore’s ability to remain
as a dynamic and relevant economy
and these warnings should not be taken
lightly. There are several reasons for these
concerns.
One, much of our economic success in
the past has been built on our ability to
be nimble and restructure. By virtue of
our resource constraints, we have often
faced times when we were losing our
competitiveness in our key industries.
However, each time that happened, we
restructured and moved up the value
chain.
I believe though that we have neared
the end of the road in terms of that
strategy. Firstly, our business costs have
hit dangerous levels and, secondly, other
countries are also catching up quickly,
reducing the room for us to manoeuvre in
moving higher up the value chain.
In this scenario, our economic strategy
hinges primarily on productivity. However,
national efforts to boost productivity
have not quite taken off. In fact, our
productivity growth has declined for three
consecutive years. With low population
growth, low immigration levels, low
12 Khwaish