Delivered on 1 September 2020
Mr Speaker sir, after a year of weak economic growth in 2019, a devastating pandemic starting in January, a global economic crisis not seen since the second world war, four COVID-19 Budgets and a General Election….here we are. The Parliament that has to see off the crisis and deal with the post-COVID World. The Parliament that has to rise up to the next global geopolitical and economic order, the next arena of national economic competitiveness, the next challenge to our social solidarity, the next chapter in our history. This Parliament, and one united people, must and will rise to the challenge that will define our generation.
We are all of one mind that the crisis should be a pivot towards emerging stronger. What should we pivot towards?
I wonder if the example of the Titanic in 1912 can serve as a useful metaphor here. The Titanic was the engineering marvel of its time, the product of all the best that capitalism and technology had to offer. It was deemed unsinkable. Yet it struck an iceberg and sank, killing over 1,500 people. The disaster occasioned major reform in international maritime matters. The link between what went wrong and the lessons that were drawn is interesting. If you will, let’s use the Titanic as a metaphor in considering Singapore’s condition.
Life Boats – our social safety nets
One sobering fact about the Titanic was that it did not carry enough functioning life boats for everyone on board – leading to a change in norms after the disaster. The civil servant who inspected the Titanic and recommended more life boats later revealed that he felt his job would be threatened if he did not give the ship the go-ahead to sail. Singapore’s social safety nets are our life boats. Insufficient life boats will undermine the confidence and peace of mind of Singaporeans, not to mention desirable risk-taking and entrepreneurial behaviour.
Many of us in this House would have been inundated by appeals from Singaporeans whose SIRS applications have been turned down. Had we instituted a Redundancy Insurance scheme much earlier and given it time to build up funds, that would have acted as an automatic stabilizer, kicking in during a crisis without government discretion and reducing the need for executive disbursements of aid. Some commentators have asked if now is the right time to introduce such a scheme. But that is precisely the point – it should have been done earlier. And even now, when we debate such issues, those debates should be guided by what we should do to meet the next crisis.
Some would say that our system of social safety nets contains some “sand in the system.”
Appealing for help when in distress, for example through schemes like SIRS, Comcare, Medifund or even a reduction in HDB resale levy when downgrading, involves multiple steps. One often needs to come down physically to a meeting, bringing multiple forms that the applicant may or may not have, though to be fair exceptions will be made for those with disabilities, as clarified in an exchange I had in this House last term. Sometimes, the officers processing the claim will ask to interview relatives to ascertain if the applicant receives family support. This is a process that can be excruciatingly embarrassing to the applicant, to the point where I know of people who withdrew their applications for that reason. These processes also consume the time and resources of social workers and public servants.
Is there a better lens through which to think about such issues? Can we focus not only on social justice, which is paramount, but also pragmatism, a value much lauded in Singapore?
Some applicants need help from society. But by helping them, society may actually benefit in the longer-term. If they fail to get that help, they may, for example, not obtain timely medical interventions, which may lead to a worsening medical condition and more state and social costs downstream if they need a more costly medical intervention – for example, many such cases may raise Medishield premiums or the fiscal burden of state hospital subsidies. Or the applicant may cut expenses for their children for meals and miscellaneous school-related costs, which could hurt their child’s prospects later in life, curtailing the future talent pool and tax base for our economy.
When there are applications for financial aid, could we, for instance, ask applicants to make declarations that they do not receive family support, bearing the risk of penalties for false declarations? Could we ask applicants to provide permission to the agency to access financial or other records on a need-to-know basis rather than requiring them to bring physical copies to a physical meeting? Could we handle more interviews remotely using now ubiquitous video-call technology?
Naval Engineering – our Economy
Next, I turn to the economy and in doing so, I declare my interest as the CEO of an international research consultancy. Coming back to the Titanic metaphor, the designers of the Titanic engineered it to be unsinkable, thanks to the latest “failsafes.” And yet it failed.
The dominant narrative holds that our economy has, also, been brilliantly engineered and painstakingly maintained through sound policy.
But the post-COVID economic landscape is changing, with many of the deeper trends having been accelerated but not fundamentally created by the COVID crisis. It’s a commonplace to say that economic nationalism is on the rise. There is “slowbalization” in global trade growth. National governments are doing more to root economic activities like manufacturing and food production domestically. In time, Foreign Direct Investment or FDI may be harder to win.
But there are also other, more subtle changes taking place. Countries, and companies, are becoming more conscious of food safety, sustainability and unfair labour, trade and tax practices. The UN’s Sustainable Development Goals or SDGs are a widely recognised attempt to address such concerns. National governments, as well as MNCs, will come under increasing pressure to address these things.
The COVID crisis has crystallized a few key questions about our economic strategies.
While unemployment and under-employment affect many Singaporeans, many foreign Special and Employment pass holders continue to hold jobs that many Singaporeans would see as desirable. To be sure, Singaporeans as a whole have never rejected a role for foreigners in the workforce throughout our history and I certainly do not. Talent from abroad can augment our economic prospects. There are some jobs that Singaporeans are not attracted to, based on current job design.
But have we thought hard enough about why not enough Singaporeans have the requisite skills for some of these desirable jobs? Why Singaporeans who face skill-obsolescence, in so-called sunset industry jobs, are not reskilling fast enough to sunrise sectors?
Many local SMEs have struggled to weather the storm. After years of schemes to support SMEs and start-ups, do we have enough regionally and globally competitive companies to anchor this local pillar, even as the external pillar becomes more challenging?
I would like to share a few suggestions about these economic challenges.
Firstly, as a policy-making principle, we should relook at existing incentive schemes to slightly enhance incentives to our companies to hire workers specifically from industries that are likely to face obsolescence in the next decade, to bring them into new and more future-ready industries, including Industry 4.0 sectors. There are several industries that are facing structural disruption. Many jobs in delivery and driving will be displaced by autonomous vehicles and drones in the decade to come, for example. The same can be said for jobs that involve pure co-ordination and narrow clerical functions, which may be overtaken by AI-driven bots.
For example, we could look at programs like Scale-up Singapore, a program to scale up promising local start-ups, and incentivise them to hire locals from such so-called sunset sectors and give them opportunities in fast-growing companies and industries. I’m sure many of these workers would value the opportunity to prove themselves in such an environment.
Secondly, we ought to take a serious look at the entire sector of workers on work permits and set long-term targets to substantially reduce, not eliminate but reduce, our dependence on such foreign workers, with sufficient time for local firms to adapt and with strong support given to local companies to retool and invest to make the transition. And Mr Speaker sir, lest anyone misunderstand my words here, I am certainly not advocating a sudden and radical reduction in the foreign worker population before local firms and other stakeholders have the opportunity to adapt.
We owe a huge debt of gratitude to our foreign workers.
But having such a large population of foreign workers raises questions about sustainability. As my colleague Ms He Ting Ru said in one of our panel discussions, the countries exporting foreign workers today may not remain poor forever. There may come a day when they don’t want to come to Singapore to do such jobs, or at least not at current rates of pay. What will we do then? Low cost today may not mean low cost tomorrow.
As my colleague Mr Gerald Giam and ex-NCMP Mr Yee Jenn Jong spoke about on the same panel, there is scope to redesign some of these jobs, in the construction sector for example, for locals, at higher rates of pay and higher levels of productivity to minimise the impact on costs. For decades, this has not been done.
Thirdly, there are many foreigners who occupy senior corporate positions. Some employers anecdotally comment that it is not easy to find enough Singaporeans who have the higher-order skills to lead large teams at the local, regional or global levels; skills like resilience, strong communication skills, finding unconventional solutions to novel problems and so on. In saying this, I do not for one minute mean to say that this feedback is necessarily accurate. There are some employers who engage in discriminatory practices against Singaporeans – that is deplorable and needs to be addressed. Indeed, I and other Workers’ Party MPs have often spoken about this. And there are many Singaporeans who have been incredibly successful as business leaders in MNCs and local firms.
But can the government consider engaging with employers to understand this feedback, assess if there is any basis to it, and circle back, as it were, to our curriculum development in our school system to understand why locals with these skills are not being produced in sufficient numbers, if that is indeed the case?
Fourthly, I would suggest that in the uncertain world that faces us, domestic entrepreneurship and innovation are going to be more important in driving growth vis-a-vis FDI attraction. Are we doing as well as we could on entrepreneurship? How do we fare on global indices of entrepreneurial performance? In the Global Entrepreneurship Monitor’s Entrepreneurial Ecosystem Quality Composite Index, for example, Singapore is simply not featured as a participating country.
Do we have enough entrepreneurs, including and especially women entrepreneurs, who can start up and scale up? If not, why not? This is a subject that warrants serious study. If there are impediments to entrepreneurship as regards access to financing, an unlevel playing field due to gaps in Competition Policy or any other such issues, these should be identified and addressed.
And lastly, on the economy, many developed country governments and MNCs are facing pressure to ensure traceability in their supply chains in respect of sustainability, fair labour and trade practices, food safety and so on – concerns given expression in the UN’s SDGs. Being ahead of the curve on these attributes can be a competitive advantage for Singaporean firms.
Our economic agencies should consider deploying relevant tools to incentivise and nudge our local firms to develop tangible programs that ensure traceability of supply chains and sound practices in these respects. This will enable them to more competitively export to developed economies in North America, Europe, Japan and elsewhere. Over time, this can be expected to become a bigger advantage.
Our companies could also be supported in their efforts to help their local suppliers and partners adopt such practices in ASEAN countries like Indonesia and Vietnam. That will help ensure that Singapore FDI in ASEAN is welcome and may even bolster our public diplomacy efforts and the Singapore national brand in our ASEAN neighbourhood.
Binoculars – Economic intelligence
Before leaving the subject of our economy, let me touch on the need for good intelligence to support economic planning. On the Titanic, the lookouts had no binoculars and the wireless operator dismissed a key iceberg warning.
We collect unemployment data using the Labour Force survey every month and publish data every quarter. In times of crisis, more frequent data on how many people are losing their jobs would help inform decision-making and public debate. We should make retrenchment data reporting mandatory even for micro-SMEs employing less than 10 persons, with the data published every fortnight, during crises like the current one. This would provide a more comprehensive, sensitive and useful data set in times of crisis as compared with current unemployment reporting or even the Jobs Situation report, published since 11 August 2020.
Regardless of Passenger Class – Social Solidarity amidst Pluralism
Finally, I would like to speak of our social ballast, our solidarity as a nation. Going back to the Titanic metaphor, despite the strict “women and children first” policy, a greater proportion of men in first class survived, than of children in third class.
The COVID crisis is testing our fault lines of class. The gap will widen between those with plenty of future-ready skills, financial and social capital versus those that have less. How do we deal with this as a nation?
As our social fabric becomes increasingly tested by these powerful forces, we must ensure that our social contract, our political institutions, culture and norms will not crack under the pressure.
COVID has illustrated how, in this new era, Singapore needs to build an over-arching political, social and economic eco-system that is not fragile. The writer Naseem Talib, who has studied this issue, writes: “It is far easier to figure out if something is fragile than to predict the occurrence of an event that may harm it.” “The classic example of something antifragile is Hydra, the Greek mythological creature that has numerous heads. When one is cut off, two grow back in its place.”
That means that systems that do not over-concentrate power, thought leadership, social capital and initiative in one organization, grouping or class, are less fragile. And in the new world that is dawning, Black Swan events may be effectively unpredictable; and anti-fragility may become as or more important than efficiency.
Singapore is characterised by a strong and well-resourced state, but a less strong civil society and a political landscape that is less plural than that in almost all other developed countries.
A stronger civil society with a louder voice may bring that element of diversity and debate that can enhance resilience, rather than over-depending on a strong state apparatus that is dominated by one political party. There is a pragmatic case for pluralism, not only a philosophic one.
Many Singaporeans have asked if the explosion of COVID-19 cases would have happened if we had heeded the warnings of civil society groups about our current system of housing foreign workers. Some had repeatedly warned of the risks of outbreaks of infectious diseases in these dorms.
Do we have a sufficiently strong civil society, meaning independent not-for-profit organizations or NPOs, media, academia and so on?
In a speech in 1967 on “How the Intelligentsia can make their contribution to society”, Dr Goh Keng Swee attacked what he called a “curious view” that the Singapore government disapproved of dissenting opinions. I quote from an intellectual biography of Dr Goh by Ooi Kee Beng, which describes Dr Goh’s speech as saying that the marginality of open debate in Singapore was serious and had to stop. What was valuable was open debate unencumbered by timidity and carried out by intellectuals who linked abstract principles with experience of ground reality.
How do we address these impulses? I’ll share a few ideas.
We can do more to nudge and incentivise wealthy Singaporeans to set up philanthropic foundations that not only provide charity but engage in research on policy issues, to provide alternative perspectives and ideas. We do have some. For example, I would cite the Lien Foundation’s paper on pre-school education in 2012, which was impactful. But we need more.
Next, we should address the perception that NPOs who receive state funding to some degree risk that funding if they publish research or ideas that contradict government policy or are seen to criticise government policy to some degree. Anecdotally, this perception still exists. Actions like the government’s removal of a grant from cartoonist Sonny Liew’s award-winning comic book due to its interpretation of Singapore history do not help matters.
Next, we can be more aggressive in providing matching grants to NPOs that aim to address issues of public policy and with a proven track record of making good contributions to public debate.
And we must do more to reboot our notion of meritocracy, as the President alluded to in her address – to celebrate unorthodox pathways to success that redefine what success is, challenging the narrative of good grades and conventionally prestigious jobs.
To be honest, this is not an easy undertaking and requires a whole of society effort, not only policy changes.
One suggestion I have would be to identify those who have succeeded in some way in making an impact in life by pursuing unconventional pathways and accord them the status of Ambassadors of the
Unconventional, as it were, or some such title. These individuals could be engaged to speak to students in IHLs, to TACs and to professional groups.
To promote unorthodox pathways, we also need to uncage unorthodox thinking. Here again, I would like to return to the education system.
All of us who are parents are familiar with primary school examination questions where extra points are awarded for expressing the right answer in the right way rather than the right answer in an unconventional way. Can we not rethink practices like this? Habits and mental models ingrained from an early age tend to stick.
We must not educate our students to always be aiming to second-guess what the right answer is and provide that answer in a formulaic fashion. That can easily translate into a future workplace attitude of second-guessing what the boss wants, rather than figuring out the best solution for the customer or the company to achieve the end-goal.
In the world they will grow up in, there may be no one right answer but rather different answers, approaches and strategies that could all be equally consistent with the facts.
In conclusion Sir, in the real-life story of the Titanic, unlike in the movie, there were heroes but no real villains. Rather the villain was a system that was not as adaptable to every conceivable circumstance as the hubris of the designers led them to believe.
It is up to us to do better from this crisis, to equip our successors for the next.