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SBF Position Paper for a Vibrant Singapore

SBF and the business community call on the Government to take bold and decisive steps to strengthen Singapore’s position now and in the long-term. The Paper:
  • is a private sector initiative led by SBF and supported by the major trade associations and chambers (TACs) and prominent members of the business community.
  • outlines wide-ranging and long-term recommendations that are essential to support business and economic growth.
  • was prompted by the difficult situation that businesses are facing, on cost, manpower, labour productivity and the challenging internal and external environment.
  • calls on the Government to look keenly into immediate-term issues for sustainable growth, and formulate new responses to overcome our constraints as a small country with no natural resources.
6 January 2016 [Singapore] – Singapore is currently at a new crossroads, facing a more challenging environment, internally and externally. Internally, the ongoing economic restructuring is taking a toll on some businesses as they continue to grapple with rising business costs, a rapidly shrinking and ageing local workforce, foreign manpower curbs, and close to zero labour productivity growth. Singapore is losing its competitiveness while other economies are catching up. Externally, the global economic outlook is lacklustre with little signs of picking up. Sustained economic growth is needed to fund our future increase in social spending.

The above challenges prompted SBF to propose and obtain the support of some 70 prominent members of the business community, 28 TACs (including the 14 European National Chambers based here), economists and academia to contribute their ideas to this Paper. Work started before the 2015 General Election was called, as the intent was to present the recommendations to the new Government. The Paper is the result of extensive consultations and meetings organised by SBF with the business community. The recommendations address the business community’s key immediate concerns as well as longer-term issues impacting Singapore’s future. The Paper comprises three strategies, articulated further in terms of immediate-term and medium to long-term recommendations.

Immediate Term
Strategy 1: Assist businesses to transit through this difficult period into the new restructured economy for sustainable growth
  • Specifically, Government to take a deep dive to analyse and address cost and manpower issues
Medium to long-term
Strategy 2: Create an economy that is not constrained by our geographical boundaries
Strategy 3: Develop Singapore as a strong home base for nerve centre, thought leadership, innovation and growth activities to anchor businesses here as they expand overseas and create good jobs for Singaporeans.

Please refer to the SBF Business Position Paper booklet for the full recommendations.

The key recommendations in the Paper are summarised as follows:

Start Doing
a) For the Immediate-term
i) Identify the key reasons for the sharp increase in costs faced by businesses in recent years and study how to better manage them, to ensure that Singapore does not price itself out of the global market.

ii) Work with SBF and TACs to
  • Review the manpower-lean policy as businesses need time to adjust.
  • Refine the foreign manpower policies in different sectors for Singapore to continue to be attractive to foreign talent, but discerning in its selection.
b) For the Medium to Long-term
i) Elevate the strategy of creating an economy that is not constrained by our geographical boundaries recognising the limit of our current strategy of attracting foreign direct investments (FDI) to Singapore. While attracting FDI should continue to
remain an important development pillar for Singapore, creating an external economy will enable us to overcome our land and labour constraints.

ii) Review the approach to developing and upscaling our local enterprises as they are critical in our next phase of economic development.

iii) Look into more measures to facilitate the creation, acquisition and use of intellectual property (IP) as a competitive edge. These include exploring the creation of a unit similar to the Korea Technology Finance Corporation (KIBO) to provide financing, acquisition, valuation and go-to-market services.

iv) Look into how our securities market can be made more vibrant and liquid, so that it can provide enterprises good access to capital.

v) Promote the flow of talent to identified growth sectors that traditionally have a lower share of good talent, and work with businesses to inculcate the right attitude in our workforce.

vi) Collaborate with businesses more.

Continue Doing
For the Medium to Long-term
i) Promote more platforms, including through incentive schemes, that encourage companies, including local enterprises, to collaborate to develop technology and solutions in mutually beneficial arrangements.

ii) Continue to foster a more entrepreneurial mindset and culture in our people. This will be important for all businesses, not only for start-ups.

Stop Doing
For the Medium to Long-term
i) Creating an increasingly complex interface with businesses, especially with an increasing number of Government agencies, rules and regulations that businesses have to deal with. Rules that are over prescriptive, over-regulate, compromise business performance, and seek to protect specific segments of the community at the expense of lowering cost and protecting the consumers should be reviewed.

Commenting on the work and contributions of the 70 C-level executives over the past six months, SBF Chairman, Mr S S Teo said “The spirit involved was admirable. The business community, regardless of whether they were from small or big, locally-owned or foreign-owned businesses, got together very quickly and worked very passionately for the good of Singapore. The major trade associations and local and foreign business chambers supported the effort”.

“This is the first time that SBF is presenting a paper of such a wide ranging and long-term nature to the Government. Some of our proposals might appear radical and require substantial changes to existing policies. There are risks involved and our proposals may not fully deliver the desired results. But we have to act decisively or risk greater failure in the years ahead”, he said.

“The newly elected Government has a fresh and strong mandate. There is no better time than now to take bold and decisive moves that will strengthen Singapore’s position now and in the long-term. SBF and the business community would like to work closely with the newly formed Government for a more prosperous and inclusive Singapore”, he added.

Next Steps
SBF will be organising a conference next Tuesday, 12 January, to further discuss the paper with the broader business community. One of the highlights of the conference is the formal presentation of the Paper to Mr Heng Swee Keat, Minister for Finance and Chairman of the Committee on the Future Economy.

Throughout 2016, SBF will be organising seminars on issues and recommendations in the Paper to elicit further feedback and suggestions from SBF members and the wider business community.

We hope that wider public discussion of these business issues will lead to the formulation of better Government policies for the future of Singapore and our businesses. We look forward to working closely with the Government to create an even more vibrant and sustainable Singapore that is the pride of its people and admired by others for its resilience and ‘can do’ spirit.

Position Paper for a Vibrant Singapore

Position Paper for a Vibrant Singapore Summary Sheet

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