- Dealing with inequality will require increasingly progressive tax and transfer policies.
- Aging will be dealt with labour market reforms and broader safety nets.
- Businesses should find new opportunities in an increasingly silver and wealthy society.
- Tech disruption is inevitable, but sizeable tech investments are incoming, helping industries.
- Climate change is an existential threat; but Singapore has resources in its arsenal to manage.
Related Insights
Commentary: Singapore at 59
As Singapore completes its sixth decade of nationhood, its remarkable accomplishments are well established. Singaporeans have some of the highest income, health, and education attainments in the world, along with deep fiscal and financial buffers to deal with shocks. Its female labour force participation rate, at 61.6%, is on part with the likes of Australia, Netherlands, and Norway. Singapore remains highly successful in attracting investment; within Southeast Asia, it has gone from 56% (2013–17) to 62% (2018–22) of total FDI. Going forward, the nation will need to deal with relatively high levels of inequality, rapid aging, tech disruption, and climate change. Given its track record, there is every reason to expect such challenges will be met with sound strategy and long-term planning.
On embracing tech-enabled disruption, Singapore is already a hub for fintech, tech R&D, and high-end manufacturing. After seeing its manufacturing share of GDP decline during the 2000s, Singapore has pushed hard to prevent hollowing out, with the ratio rebounding since 2018. Given the spate of recent investment announcements in chip manufacturing, and Singapore’s growing symbiosis with the neighbouring Johor region of Malaysia, issues like land availability and cost of electricity/water can be tackled, in our view. Meeting challenges like inequality and aging require progressive tax and transfer policy, labour market reforms, and resource allocation. We see concerted efforts in these areas through successive budgets, and we expect much more action in the coming years. Key impetus will come from the public sector, but entrepreneurs should also be able to find opportunities in recalibrating local businesses toward the increasingly silver and wealthy population.
For the coming generations of Singaporeans, rising sea levels and global warming pose an existential threat. Climate change requires solutions at the global level, but they also require considerable local resources. Singapore ranks 59 in the ND-GAAN global ranking of climate vulnerability, but the same survey ranks Singapore number 1 in readiness. Cognizant of the headwinds ahead, Singapore has its growth engines revved with plenty of fuel saved up.
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Nathan Chow 周洪禮
Senior Economist and Strategist - China & Hong Kong 高級經濟學家及策略師 - 中國及香港
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