Four key challenges confront Singapore in the next 50 years, Home Affairs and Law Minister K. Shanmugam said yesterday.
These are: balancing financial prudence with higher social spending, a rapidly ageing population that does not replace itself, competition from abroad and terrorism.
Speaking to students at a forum in Nanyang Technological University, where he also answered questions on a range of issues, Mr Shanmugam outlined the “sobering reality” that the Government has in recent years been spending more than it collects.
This, he added, is possible because earlier generations of Singaporeans had saved enough, allowing the Government to tap on the income derived from investments.
He noted that whenever the Budget comes around, MPs, whether from the People’s Action Party or the opposition, will “stand up and talk about how the Government should be spending more, because that is popular”.
But he added: “Always ask yourself, every time a proposal is put forward, where is the money going to come from? Who is going to pay for it?” He warned the students that their generation will end up having to pay more taxes to clear the debt.
Singapore is one of the fastest greying populations in the world.
Besides raising healthcare costs, an ageing population will affect the country’s economic vibrancy and tax base, and result in fewer young people available for a defence force.
Mr Shanmugam shared a news article on how adult diapers will soon outsell baby nappies in Japan, and noted that Singapore is ageing even faster than Japan.
Abroad, Singapore faces both regional and global competition, with many countries trying to eat its lunch, he said. Whether it is Kuala Lumpur and Hong Kong vying to be the next top financial hub, Thailand trying to overtake Singapore as the region’s largest air hub, or countries like Indonesia and Malaysia moving up the petrochemical value chain, Singapore cannot afford to take its position in the world for granted.
On terrorism, he said the Government views the threat of a terror attack as the highest it has ever been for Singapore.
He also said there was a limit on how much Singapore can do in working with its neighbours in tackling the problem of radicalised fighters returning from the Middle East.
“Sovereignty means they decide for themselves what their laws are,” he said. “We work closely with them on intelligence, on other issues, but we can’t decide what they do with their people, that is an inherent problem.”
Amid these challenges, there are also opportunities for Singapore, Mr Shanmugam noted.
While efforts to integrate ASEAN have yet to bear fruit, Singapore is well-positioned to be the financial centre for the region “if we can get that project going”, he said.
As a small and nimble economy, Singapore is also well-placed to take advantage of opportunities offered by China and India.
Singapore’s continued emphasis on education means a people who can think on their feet, which will be a crucial skill in a more unpredictable world. “They will also be adaptable. In fact, they will become the disruptors of other people,” he said.
Singapore is also confronting the terrorism problem head on, said Mr Shanmugam, who emphasised that the country’s security is the responsibility of all Singaporeans.
To this end, the new SG Secure initiative will train people to be better prepared for crises.
Noting that the goal of groups like the Islamic State in Iraq and Syria is to divide societies and alienate Muslims to fuel its recruitment drive, Mr Shanmugam called on Singaporeans to resist Islamophobia even as the Government continues to be tough on extremism.
He added that Singapore manages to maintain a harmonious community – by and large – by getting people of various faiths as well as agnostics and atheists to “think of ourselves as Singaporeans and we have to work very hard at that”.
yanliang@sph.com.sg
This article was first published on March 29, 2016.
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