Senior Minister of State(SMS) for Finance and Transport, Mr Chee Hong Tat spoke about two

primary themes about Forward SG. The first theme he spoke on was “Economy Development

Prospects & Challenges of Singapore”. The second theme he spoke about was “Inclusiveness,

Sustainability, & Identity of Singapore”.

Regarding the first theme, he spoke about how Singapore needed to be creative in attracting

investors. He believed it is important because the Multinational Corporations (MNCs) that help

drive Singapore’s economy and job creation are greatly impacted by effective tax rates that are

imposed on them by their home countries. This effectively forces MNCs to pay back the

difference in taxes between the foreign nation they are doing business in and their home country.

This is done to reduce tax havens, and for countries to bring back MNCs home. As such,

Singapore must attempt to stand out by selling itself as a production house. He also spoke about

how the Singaporean government helped Small & Medium Enterprises (SMEs) during the

economic downturn caused by the Covid-19 pandemic. The government helps create an

environment in which SMEs can survive. This is accomplished through grants that help SMEs

stay afloat long enough for them to pivot to a more sustainable business model. They also

tailored government contracts to SMEs by allowing SMEs to win contracts without a track

record, and have fewer requirements for SMEs to meet. However, he emphasised the importance

of SMEs being willing to change.

For the second theme, he spoke about inclusiveness, sustainability and the identity of Singapore.

He described Singapore as a compassionate meritocracy that aimed for cohesion. A primary

concern of the government that he raised was the social stratification of Singapore. He spoke of

concerns for intergenerational mobility and the risk of a permanent social underclass, a group of

people unable to improve their lot in life. To address this, the government installed a progressive
wage model which helps workers upskill and become more productive, thereby increasing their

wages.

The talk that the SMS conducted helped me better understand the role of the government during

a period of economic downturn. A governments role in an economic downturn should be to

apply cooling measures. The SMS helped me better understand how these measures could

materialise in a Singaporean context. As previously stated, the government took action to help

SMEs cope with the pandemic. Of note to me is the Singapore’s government unique take on

protectionist policies. Protectionist policies are generally policies that protect domestic industries

against foregin competitors through tariffs, import quotas and subsidies, or restrictions placed on

the imports of foreign competitors. Because Singapore is a small state reliant on MNCs for job

creation and productivity, protectionist policies would hurt its people just as much because

foreign investors would be dissuaded from investing in Singapore. As such Singapore instead

focused on empowering people and SMEs to compete in a global market tremendously affected

by the pandemic by providing funds and opportunities to upskill or pivot to a more sustainable

business model. In order to do this, the government adopted an attitude that had them focused on

fiscal sustainability and stewardship, that is to save for future generations. They achieved this

through the Net Investments Return (NIR) framework, which helps balance the needs of the

present and that of future generations. The NIR Contribution (NIRC) is calculated by considering

up to 50% of net assets invested bySingapore’s GIC Private Limited, Monetary Authority of

Singapore – MAS (central bank), and Temasek Holdings, and 50% of past reserves. This recalls

the concepts brought up econommist Richard Musgrave regarding a governments role in the

economy. According to Musgrave “market mechanism alone cannot perform all economic

functions. Public policy is needed to guide, correct, and supplement it in certain respects. “
(Musgrave, 1989, p.5) This informs the need for government intervention during a crisis during a

pandemic. Leaving market forces to work alone would result in local businesses floundering and

failing with the changing economic conditions.

His talk also helped me better understand the role a government has in ensuring the well-being of

its citizens, and the steps it might take to do so while courting foreign investments. It enriches

my understanding of themes like paternalism and big government. Referring to course material,

it brings to mind Keynesian economic theory. In Roskin’s chapter on political economies,

Roskin explains that “a government would ‘aggregate demand’ by ‘countercylincal spending’ on

public works and welfare.” (Roskin, 2017, 293) Singapore governments’ version of that, in a

“compassionate meritocracy”, is to provide welfare to lower-income families through handouts,

while dipping into the reserves funded by the NIR. This was evident throughout the Covid-19

pandemic when Singaporean government introduced policies that saved jobs like the Jobs

Support Scheme, where the government co-funded up a proportion of the first $4,600 to allow

local companies to keep their employees. For those that lost their jobs they introduced the Covid-

19 Recovery Grant, which supported Singaporeans who lost their jobs due to the pandemic by

providing a monthly stipend.

Looking to the future, the Singaporean government should do its best to limit the impact of

inflation on lower socio-economic classes. With an increase in the Goods-&-Service Tax from

7% to 9%, poorer Singaporeans will be unduly affected. The Singapore government has taken

steps to limit the impact through GST vouchers but more can be done to reduce the impact of

GST on poorer Singaporeans. One step they could take might be to further subsidise essential

items like groceries. They should also consider including a minimum wage as part of the

progresive wage model. While I believe that enabling low-skilled workers to upskill and better
their lot in life is an admirable model, enforcing a minimum wage, or more specifically a living

wage will ensure that the quality of life of these workers prove sufficient for them to upskill.

To conclude, I have two questions I would like to ask the SMS, given another opportunity with

what he spoke to us about. In the name of increasing inclusivity, how can the government’s

recent enshrinement of the definition of marriage between a man and woman be considered

inclusive of LGBTQ Singaporeans? Why was it necessary to prevent the challenge of it? In what

way will the institutionalised discrimination of LGBTQ Singaporeans build a more inclusive

Singapore?

Can Singaporean workers be protected in an increasingly competitive economy if the only union

they have, the National Trades Union Congrress (NTUC), is so closely intertwined with the

government? Does that not mean that if the government chooses to allow an MNC to exploit

Singaporeans, NTUC might simply fall in step rather than advocating for their workers? I believe

the Singapore government must explore these questions given its apparent pro-business stance.

While I understand the importance of attracting MNCs and foreign investment, Singapore's

greatest natural resource is its people, and they should not be unfairly exploited.

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