Singapore — There has been cautious optimism from government leaders after Singapore drew an impressive S$17.2 billion in investments last year, exceeding its medium to long-term annual goals of S$8 billion to S$10 billion in investments, despite the economic fallout of the Covid-19 pandemic.
The Economic Development Board (EDB) reported on Wednesday (Feb 20) that the fixed asset investment commitments Singapore attracted last year is higher than the S$15.2 billion that was secured in 2019 and is the highest investment figure in more than a decade since Singapore attracted S$18 billion in investments in 2008.
The EDB also reported that companies incurred S$6.8 billion in Total Business Expenditure per annum last year, compared to S$9 billion in the previous year.
The Government expects 19,352 new jobs to be created when these projects are fully implemented in the coming years with a projected contribution of S$31.2 billion in value added per annum. Some 45 per cent of these jobs will be in production, while another 24 per cent will be digital-related jobs.
In a press interview, Minister for Trade and Industry Chan Chun Sing commended the “strong performance from the EDB team in an exceptionally challenging year”.
Mr Chan said there are several factors that attract investors to Singapore, such as a strong regulatory system, a competent government, a skilled local work force and the ability to draw foreign talent. These factors give Singapore a “trust premium” that is valued in top multinational companies.
And in a Facebook post on the same day, Mr Chan cautioned that there are challenges in the road ahead even though the EDB’s investment figures are encouraging. He said:
“The global situation continues to be plagued by uncertainties due to the ongoing pandemic and geopolitical tensions. There are various pre-Covid factors which will affect the level of investments into Singapore in the future.
“These include the growing competition for investments globally and greater reshoring of supply chains to ensure supply chain resilience.”
Some of the challenges Mr Chan foresees are the recurrent waves of Covid-19 spread and the slow rollout of vaccination schemes around the world.
He said the Government will take a four-pronged approach to drive economic recovery and position Singapore strongly for continued growth. He mentioned the need to strengthen our position as a critical node in the global value chain, forge new trade rules in forward looking areas, pursue an innovation-led and sustainable economy and double down on transformation efforts to help companies and workers stay resilient and competitive in a Covid-world.
He added: “While EDB has done well amidst an unprecedented year, we should not expect the road ahead to be an easy one. In order to ensure our continued success, we must continue to be flexible and adaptable – government, companies and workers alike.”
Sharing Mr Chan’s post on his own Facebook page the same day, Speaker of Parliament and former Manpower Minister Tan Chuan-Jin said:
“Investments and economic growth do not exist for its own sake. It’s always about creating jobs for our Singaporeans. These jobs aren’t just created directly by the companies themselves but also in terms of economic activity generated that create jobs in supporting businesses.
“These economic activities will also generate income through tax receipts, which then allow us to do the things we need to do. They also create demand that will cascade through the economy in different ways.”
While Mr Tan appreciated EDB’s efforts, he echoed Mr Chan’s cautious optimism. He pointed out that businesses can choose where to locate themselves and warned that their decision to select Singapore and stay on here is not a given.
He asked: “What happens when they stop coming or when more leave?” /TISG
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