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Singapore is positioning itself for a post-Covid world with massive investment in innovation, over and above the immediate support it’s giving to help the economy rebound from possibly its worst downturn on record.
The government will set aside more than S$20 billion ($14.3 billion) to support research in “high impact areas” such as health and biomedical sciences, climate change and artificial intelligence, Deputy Prime Minister Heng Swee Keat said in a televised speech Saturday. The investment is part of a five-year research and development plan, which is currently being finalized.
“All countries, including us, are providing immediate support, to provide a cushion,” said Heng, who is also finance minister. “But we are going further, investing to give everyone a springboard, to bounce back from this even stronger. In Singapore, we never stop thinking of tomorrow.”
Heng’s speech is the final one in a series of ministerial broadcasts as the nation girds for an upcoming election. On Friday, the city-state entered the second phase of re-opening its economy after a multi-month lockdown to avert the coronavirus’ spread.
With Singapore’s economy facing its biggest contraction since independence in 1965, and employment sliding in the first quarter by the most on record, Heng said the government’s most urgent task is job creation. Officials have pledged to create 100,000 jobs and training opportunities to help cushion the blow.
“We are doing our best to keep viable businesses afloat, helping them hold on to their workers for as long as possible, so that you can preserve your livelihoods,” Heng said, while also highlighting that it was the first time the government has provided direct cash support to self-employed workers on a large scale.
Among one of the most export-dependent economies in the world, Singapore has no choice but to double down on its trade status coming out of the crisis, said Heng. “We are finished if we close up,” he said.
Heng reiterated the government’s commitment to infrastructure investment, including greener developments and food security initiatives. A series of industry-led groups assembled by the government will explore new opportunities in areas such as robotics, e-commerce and supply-chain digitization, he added.
The unprecedented stimulus and investment pledged is a particular shock for Singapore, which is traditionally prudent with its fiscal spending. Heng acknowledged that he “never expected to put up four budgets, one after another, within just 100 days” for a total of almost S$100 billion, and more than half financed from past reserves.
“We are very grateful to our past generations, whose blood, sweat and tears left us with these deep financial reserves,” said Heng. “So let us remember -- once we have recovered from this crisis, our generation must build back better.”
It’s only the second time that Singapore has drawn down on its national savings. In 2009, it received approval to use S$4.9 billion of reserves to help fund the government’s support package during the global financial crisis. The government paid back the amount drawn to the reserves in 2011 after the crisis passed.
Heng noted that Singapore has remained one of the most competitive economies in the world. That distinction was highlighted earlier this week when the city-state retained its No. 1 position in a global competitiveness ranking by IMD Business School in Switzerland.
A stronger domestic economy will help Singapore strengthen its reputation with investors globally, Heng said.
“A trusted and reliable Singapore, relevant to the world, will in turn attract investments into Singapore, and give Singaporeans an edge in seeking opportunities at home or abroad.” he said. “This Singapore premium is precious.”
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