Our Road Ahead To SG100: Key Challenges of the Singapore Economy
We just celebrated the 52nd birthday of Singapore. Certainly we know that the road here was not easy, and the key challenges that will confront Singapore in the next 50 years will be vastly different from those faced by the previous generation. With so many factors at play, how will ‘the little red dot’ play a part in the world economics in the next 50 years is anybody’s guess.
The road ahead
While Singapore has evolved from a sleepy fishing village to the bustling hub in ASEAN and arguably in Asia, the road ahead will be bumpy. Similar to most developed economies, it is hard to maintain and for our economy to continue growing at above 3% rates. In fact, our PM had just provided a guidance of 2.5% GDP growth this year, which i think was a pleasant surprise, given the pessimistic backdrop as we entered year 2017 (Trump, Oil & Gas shock, EM lacklustre growth).
Like many metropolitan cities and countries, Singapore has an aging population issue and as we had witnessed in Brexit, Trump and Europe (albeit at a slightly milder tone) we are encountering resistance against immigration friendly policies. By 2030, 1 in 4 Singaporeans will be above the age of 65. This will undeniably add pressures to our economy and possibly increasing stress on our working population (i.e aging workforce, healthcare costs & etc). If workforce numbers do not increase, (as more Singaporeans retire or leave the work force), in order for equilibrium to be restored, productivity has to only go higher. Otherwise, in the long run Singapore can face repercussions.
Though I believe that technology should be deployed to bring about higher efficiency and harness greater value add to our economy, I can see the challenges from the social, political and other aspects.How many jobs can you possibly replace with robots or to what extent can automation be introduced to the full business chain? Is it feasible and practical to replace all manual processes with bots and machines? Furthermore, at times, one would ponder if it had been really cost effective to adopt technology or was it for the sake of keeping up with the Joneses?
I guess, much have been discussed and said about the challenges of being a small city state with regard to how and what should a “small” country like Singapore should behave. Politician, I am not, but I think I’m a realist who can understand the potential headwinds that we are facing and will be encountering in the future. We are a prized asset, blessed with stable government institutions and a strong rule of law. Will these change? I hope not, but being a statistical student, one should never assign a zero probability to such risks.
What other challenges do you see? I’m quite an optimist, I believe I can see SG 100, though in most likelihood i probably will have been senile or be no longer around.