SINGAPORE: Singapore needs to maintain its high reputation among global investors as a matter of survival, Prime Minister Lee Hsien Loong said, stressing that Singapore is a small country with many limitations.
“We must show the world that we are indeed special, and can sustain our edge over other countries and cities,” he said at a People’s Action Party (PAP) online lunchtime rally on Monday (Jul 6).
“Then MNCs (multinational corporations) will invest in us, other countries will take us seriously and Singapore has a place in the sun. Otherwise, we will just fade away and be forgotten, like so many city-states in history.”
This is especially as Mr Lee said COVID-19 has hit Singapore’s economy like never before, pointing out that the Government has rolled out not one but four Budgets of S$100 billion, “far above” its normal spending, in a year.
“That gives you a sense of COVID-19’s huge impact on businesses, and especially on workers and jobs, that we have had to counter,” said Mr Lee, who is also the PAP’s secretary-general.
“But it is not just about indiscriminately writing checks. We need to understand who is hurting, who needs help most, how to help them, what works and what doesn’t.”
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This has been done “systematically” over the past few months, Mr Lee said, pointing to how the S$23.5 billion Jobs Support Scheme saves employers a large part of workers’ wages and keeps them employed, while households and those harder hit are given more support.
Mr Lee said the Government had also in an unprecedented move, passed emergency legislation for rental and contract waivers.
This protected contractors who missed project deadlines, couples who could not hold weddings and tenants who could not do business due to the circuit breaker, he said.
“Many individuals and SMEs (small- and medium-sized enterprises) would have been badly hurt and many good companies would have gone under,” he added.
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Mr Lee said a team comprising Minister of Law K Shanmugam and Senior Minister of State for Law and Health Edwin Tong, as well as business and law experts, managed to put this Bill together in nine days.
Parliament then passed it in one day “on a certificate of urgency”, he said.
“We did it again with a second set of emergency measures two months later,” he added. “This is the difference that a highly competent Government can make to your lives.”
Prime Minister Lee Hsien Loong speaking at a People’s Action Party rally on Jul 6, 2020. (Photo: PAP)
ATTRACTING INVESTMENT
But Mr Lee said these budgetary and legislative measures were emergency relief and cannot be sustained indefinitely.
“The more fundamental solution for jobs, is to turn around our economy,” he said.
“We need to create new jobs. To do that, we must attract new investments. And that means maintaining confidence in Singapore, so that companies will not lose faith in us in a crisis.”
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Mr Lee cited how in 1985, when he had just entered politics, Singapore found itself in a similar situation when it experienced a sudden recession, with annual gross domestic product growth dropping into the negative for the first time since independence.
Mr Lee said he chaired an economic committee to study how it could lift Singapore out of the recession and reposition its economy for the future.
“We took decisive, emergency measures, including cutting CPF (Central Provident Fund) contributions,” he said.
Mr Lee said he and the younger ministers held many meetings with union leaders and workers to persuade them.
“We didn’t just make one speech, or hold a press conference, and expect people simply to swallow the bitter pill,” he added.
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At the National Day Rally that year, Mr Lee said then-Prime Minister Lee Kuan Yew used charts and tables to explain to Singaporeans why the recession had happened, how Singapore had lost its competitiveness, and what it had to do to get out of the recession.
“People said that Mr Lee (Kuan Yew) sounded like a professor giving Singaporeans an economics lecture,” he said.
“But Singaporeans understood the message and supported the tough measures. The measures worked and within a year our economy was growing again. That is what political leadership is about.”
WHO WOULD BE MAD ENOUGH TO INVEST IN SINGAPORE IN A RECESSION?
Once the situation stabilised, Mr Lee said the Government went on an offensive to reassure investors and attract new ones from across the world.
This included placing a full-page advertisement in the Wall Street Journal headlined: “Who would be mad enough to invest in Singapore in a recession?” It carried the signatures of nine global heads of MNCs, including Apple, Seagate and Motorola.
“Nowadays, people might call this clickbait,” Mr Lee said. “Several of these companies are still here today, 35 years later.”
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Mr Lee said these MNCs were prepared to invest in Singapore during an economic crisis because they knew it had industrious and capable workers.
The country’s unique tripartite relationship, where unions cooperate closely with employers and the Government to generate growth and jobs for workers, meant “they are not opponents to be countered, but partners-in-progress”, he said.
The Economic Development Board (EDB) was a “one-stop shop” where investors could settle their problems, Mr Lee said, highlighting that unlike similar agencies in other countries, the EDB could make things happen as the Government was working as one.
Furthermore, Mr Lee said investors knew Singapore had a first-rate Government after their interaction with ministers. Mr Lee recalled one deciding to invest in Singapore after meeting a minister, something he described as a “huge compliment”.
“And finally, they knew the Government enjoyed Singaporeans’ strong support,” he added. “So the ministers could take decisive steps if needed, and make the right decisions to promote growth and create jobs.”
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