Before taking questions from the students during the dialogue session which lasted almost two and a half hours, Mr. Shanmugam gave a keynote address in which he spoke at length about the internal and external challenges facing Singapore.
Domestic issues include a “tight balance” the government must strike on the country’s finances amid the inability to raise taxes while dealing with higher spending needs, a rapidly aging population in Singapore and income inequality.
The minister also touched on external threats, where he largely focused on economic competition.
Mr. Shanmugam gave examples to illustrate the competition faced by Singapore’s two key sectors – maritime and aviation. For example, the former, which supports around 170,000 jobs and accounts for 7% of the country’s gross domestic product, faces challenges such as changing trade routes and the emergence of new ports in the region.
He went on to cite a survey by PricewaterhouseCoopers, which estimated that regional economies such as Indonesia, Thailand, the Philippines, Malaysia and Vietnam would be among the world’s trillion-dollar economies by 2030. .
“If all of our neighbors are doing extremely well and have a full suite of services, then the question is, how relevant are you?
“We want them to succeed, but we want to be relevant, so the main task is to find a way to continue to be relevant,” he said.
Mr. Shanmugam also highlighted new trends brought about by the COVID-19 pandemic, such as the trend towards remote working.
“The more workers say I want to work from home, the more employers are going to say home doesn’t have to be Bishan or Ang Mo Kio. Home can be Bangalore or Shanghai or Manila, where people are willing to work for a third (or) a quarter (of your salary).
“So what is your value proposition? Why should people invest in Singapore and employ you? he asked the students gathered at the Lee Kong Chian Lecture Theatre.
So far, Singapore has “done well”, but the minister warned that this “is due to the past” and “does not predict the future”. Adding that Singapore has managed to build an economy “so substantial and so disproportionate to (its) land area and population”, the risk now is “complacency”.
Singapore’s current advantages such as rule of law and freedom from corruption can be replicated by others, he warned, while adding that other countries also have their own advantage, such as the availability of land and lower cost of doing business.
“So there are these questions to think about and whether you think in 10 years, 20 years, 30 years we will be able to maintain our relative efficiency, or whether others will overtake us.”