MINISTRY OF TRADE AND INDUSTRY

Mr YEO CHEOW TONG Minister for Trade and Industry

Economic Growth

The Singapore economy grew strongly by 9.8% in 1993. The economic boom in Asia has cushioned us against the weak economic performance of the developed countries, our traditional export markets.

2. We must participate fully in the business opportunities in the region. Our competitive advantage remains unchanged: a competent and hardworking quality workforce and excellent infrastructure. We will focus on developing human resources so as to raise productivity and the quality of goods and services produced.

3. We will expand economic cooperation with countries in the region. Becoming an international business hub with first class services in finance, commerce and communications will help. We will closely support the efforts of the business community to build linkages and participate in key markets.

The Domestic Economy

4. We will be pro-active in our industrial development to counter the increased competition for manufacturing investments. Other developing countries offer vast resources at low rates. They are also catching up on infrastructural development. We must compete on the basis of capabilities. We will develop specific industry clusters to improve our competitiveness. We will invest selectively in strategic industrial projects with private sector partners. 5. In industrial promotion, we will shift from offering ourselves as an attractive offshore production and services centre to making Singapore a regional home base for MNCs and local companies. We will make Singapore a place for high-value added manufacturing activities and related services such as design, R&D and marketing. We will maintain our industrial base and maintain the manufacturing sector's contribution to GDP at around 25%.

5. We will continue to emphasize education and training. A skilled workforce can adapt better to the demands of new economic activities. More places in the universities, polytechnics and technical institutes will be created. Presently 16% of each cohort enters university. 7% of the workforce are graduates. By 2000, 12% of the workforce will be graduates.

6. We will continue to upgrade those who are already working. The National Productivity Board (NPB) will train 100,000 workers through structured on-the-job training by the year 2000.

7. With an aging population, increasing longevity and a higher retirement age of 60 years, we have to continually retrain our workers to meet the changing demands for new skills. NPB will continue to target specific skills enhancement programmes like the Training Leave Scheme, the Fast Forward Scheme and the Training Initiative for Mature Employees (TIME) at older workers to help them stay productive. We will continue to seek new ways to help workers participate in training programmes, and to encourage them to continually upgrade themselves.

8. We must produce high quality products and services. The National Productivity and Quality Council will spearhead a National Quality Strategy to inculcate a sense of quality consciousness in our people and implement initiatives to promote quality systems. The Singapore Institute of Standards and Industrial Research (SISIR), our national standards and certification body, will actively promote the SISIR ISO 9000 certification scheme for quality management systems. NPB will also help small retailers to upgrade their productivity and management systems, including forming of franchises.

9. The National Science and Technology Board will promote research and development in key technologies that are economically relevant. This will deepen our knowledge-intensive activities and attract more companies to do R&D in Singapore. We target R&D spending to reach 2% of GDP in the next few years, with a larger share coming from the private sector.

10. We will continue to upgrade our infrastructure to meet the needs of industries. The Jurong Town Corporation (JTC) has begun amalgamating the group of seven islands off Jurong for industrial use. The project will add 1,800 ha of industrial land to our stock and provide us enough industrial land for the long-term. The Public Utilities Board (PUB) will spend $8.4 billion over the next 5 years to expand its generation, production, transmission and distribution capacities for electricity, water and piped gas.

11. STPB will improve the tourism product in Singapore and market it overseas. As many tourism "hardware" projects including large scale conservation of historical areas have been completed in recent years, STPB will now focus on the "software" aspects to add charm and enjoyment to the total tourism experience. We will improve the quality of our retail sale services as shopping is an important tourist attraction. Creative lighting of Singapore River bridges and the Empress Place, Victoria Theatre and Concert Hall will create a dramatic backdrop to riverside activities. Sentosa Development Corporation will develop a leisure and tourist resort with tourist attractions and residential properties at Buran Darat on Sentosa. We will develop the Southern Islands as a resort with water-based recreational facilities.

Regionalisation

13. Singapore will step up its regionalisation thrust. Local companies have developed the organizational, technical and marketing skills to venture overseas. They are poised to participate in the opportunities of the fast growing regional economies.

14. We will encourage local companies expanding overseas to team up with MNCs to pool resources and tap complementary strengths. We will draw on the expertise and track record of government agencies in infrastructure projects to help companies. A Regional Business Forum will be established for exchanging dialogue with the private sector. We will streamline government regulations and financial assistance to facilitate overseas business operations. TDB will help companies expand their overseas network through franchising and licensing.

15. We will continue to expand economic cooperation activities with other countries. We will participate fully in the Common Effective Preferential Tariff (CEPT) Scheme to establish the ASEAN Free Trade Area. In the Growth Triangle, more than 150 local and multinational companies in Singapore have set up manufacturing operations in the Riau Province and Johor. In China, a consortium of Singapore companies will develop a 70 sq km industrial township in Suzhou city. We will support this effort by working with the PRC government on transfer of public administration and urban management capability to manage the township well. A Singapore-Shandong Business Council has been established to facilitate trade and investment between Singapore and the Province of Shandong. A Vietnam-Singapore Commission for Cooperation and an Indian Business Interaction Group have also been set up.