People’s Power Party (PPP) Response Committee on the Future Economy Report

For Immediate Release:

People’s Power Party (PPP) Response Committee on the Future Economy Report

We refer to the Committee on the Future Economy report. 

There is nothing exceptionally new from the report apart from recognizing International Trade and Relations as an important integral component of our Economic Success.

International Trade Treaties

People’s Power Party would like to reiterate our stance that whatever Trade Agreement or Treaties signed by the PAP must put Singaporean workers’ interests as the uncompromising first priority.

Singapore’s ruling People’s Action Party (PAP) has been very focused on securing trade agreements for its economic sustainability in an increasingly globalised world. 

Nonetheless, trade deals had more often came along with some trade-offs. One nagging opportunity cost has been the unemployment of locals.

In recent years and decade, we have seen PAP government having negotiated and signed Free Trade Agreements without much public consultation, debate or engagement. These FTAs include CECA signed with India which had basically opened up the flood gate for Indian PMETs to get jobs and stay in Singapore without much control. This has inevitably displaced quite a number of Singapore workers. In return, CECA mainly benefited large corporations like Temasek Holdings and GLCs to invest in India without substantial job creation for Singaporeans. 

We have also seen PAP government negotiated the now-failed TPP (Trans-Pacific Partnership) in secrecy without any public consultation. Only big MNCs were involved in the negotiation without the involvement and participation of our Labour Union or any other political parties or civil society groups. 

The failure of the TPP may mean a loss of opportunity for Singapore’s businesses.

However, we are more concerned about the need for transparency of any negotiation or signing of such trade pact . 

The failure of TPP coupled with the shocking “Brexit” of the United Kingdom’s withdrawal from the European Union, presented starkly to Singaporeans sudden moves against agendas that they have been herded towards.

Coming out of these shocking episodes is the clamour for transparency. The peoples of those nations wanted their voices to be heard and they have done so. The citizens of the US and UK have signaled that they want to be involved in decision-making that involves their lives and affects their nations. They want to know the details and not just be told. 

It would only be wise for the Singapore government to be open for a constructive dialogue that discusses the costs and benefits of all trade pacts including the TPP. 

PPP would like to suggest a public forum in which Singaporeans would be able to discuss any future negotiation of Free Trade Agreement with the Singapore government directly. This is especially important when FTA in present context is no longer just about demolishing trade barriers but involve more other aspects such as free mobility of labour, legal aspects of commerce and trade etc.

International Relations

We have seen how PAP’s missteps in handling international relationship had caused much upheaval, tension and unnecessary pressure to Singapore businesses in China. 

PPP would like to remind PAP that it no longer enjoys the protection of political goodwill and respect that Mr Lee Kuan Yew had garnered and it should tread carefully in the world politics, especially when it comes to the politics of big countries with huge economic clout. 

Singapore has survived and prosper throughout the decades with the help of great diplomacy in building bridges, making friends and creating political stability in our immediate region of existence. We have survived the uncertainty due to Confrontation, Vietnam war, Korean war, Cambodia war and the uncertainties due to the cross strait ties between China and Taiwan. We have managed to turn past enemies and threats into friends. We should not create unnecessary tensions in our region which is critical to our survival and prosperity. 

Apart from Globalization and Free Trade, Diplomacy of Peace is one of the most important survival strategy for an open economy like Singapore. It is worrying to witness how the current PAP government handle International Relationship and Diplomacy which will eventually affect our economic well being as a whole. 

We can only hope that the current mindsets of those involved in PAP government’s dangerous diplomatic stunts could be replaced with more humility and wisdom. 

Soft Power of Cultural Essence and Organic Industrial Growth

While we are not against the PAP government spending money on upgrading the skills of Singapore workers, but we observe throughout the decade, such programs had minimum value add to Singaporeans when our workers are not protected adequately from the displacement due to the influx of foreign PMETs. 

We also observe that PAP government has finally given up spotting “successful industry” to bet on after experiencing mediocre results from past bet on Bio-Tech industry. PAP government had led us in chasing rainbows one after another in the past decades but in the end, many Singaporeans of past generations eventually found that their skills are fast becoming obsolete when PAP tried to focus on other industries. 

We have serious doubt of such economic strategy. We would like to stress that most productive and useful innovations are derived from organic industries instead of learning something totally new and trying to compete with other countries which are already experts in this field. 

Singapore should identify its own Organic Growth Industries: those industries which we have comparative and competitive advantages. Innovations should be developed from these Organic Growth Industries to increase productivity. Else, we would be chasing Rainbows again like a headless chicken in the fast changing world of technology.

While technology is important in today’s economy, we should not lose sight of the Soft Power of Cultural Essence. We observe that there is a lack of utilization of Cultural strength in our local businesses and industries. 

There is a lack of in-depth exploration of the huge economic potential of our rich cultural heritage. Although we have a few good local brands that go regional and international, but compared to other countries we are still lacking behind. It shows that we have not put in enough efforts to help local companies in making use of our Cultural strength to enhance our international brand status.

Our cultural heritage could also provide us an advantage in enhancing our role in economic connectivity with our regional neighbours. But the apparent lack of general knowledge of our neighbouring countries has become a hindrance in making us an effective hub for the region. 

Increasing Business Cost vs Productivity Growth and Wage

DPM Tharman had put up a grand strategy to increase yearly productivity growth by 3% back in 2011. It seems that it has become an empty promise again. 

There are a few reasons why our Productivity Growth has been extremely low in recent decades. The high cost of doing business in Singapore has forced businesses to look for cheaper labour from foreign sources. This high business cost is basically due to the high rental which was basically controlled by GLCs and government agencies. Apart from that, indirect taxes such as COE on commercial vehicles has also taken a toll on businesses, especially business start-ups. 

Instead, PAP had addressed these issues by opening up the floodgate for cheap foreign labour which inevitably affect local wages and even displacement of local workers creating underemployment. Such move will inevitably reduce productivity growth as well as wages. 

The only way to ensure that Singapore continues to grow with high productivity growth is to prevent a Rent-Seeking Economy to develop. Rental and indirect taxes should be controlled so that more resources could be put into developing local human resources as well as business development.

Unfortunately, the CFE report did not touch on these important issues at all. 

Business Connectivity and Market Intelligence

There is generally a weak support of Market Intelligence and Research provided to local SMEs to help them in reaching out to the various matured as well as emerging markets in the region and the world. 

While the GLCs enjoy the support from the various government statutory boards in providing the necessary help in getting connected to the world and obtaining market intelligence of target markets, SMEs lack a comprehensive approach in obtaining such information and network.

If networking and connectivity are crucial for our local economic success, we would expect the PAP government to put more resources into building up resource centre and network of trade offices that focus on providing relevant information to local SMEs. 

Conclusion

We hope that this CFE report is not just another old wine in new bottle effort by the PAP government.

Sivakumaran s/o D Y Chellappa

Vice Chairman c/o Head of Policy Research

For CEC of People’s Power Party