Professor Yohanes Eko Riyanto
Distinguished guests,
Ladies and gentlemen,
1. Good afternoon.
Introduction
2. It is my pleasure to join you today for the 15th annual MTI Economic Dialogue. The annual dialogue is an important platform for students to gain insights into the key economic issues and challenges facing Singapore. It also provides students with the opportunity to gain a deeper appreciation of the role that the Economics discipline plays in policy making.
3. The theme for this year’s dialogue is “Riding the Wave of Change: Charting Singapore’s Economic Future in a Dynamic World”. We exited the acute phase of the COVID-19 pandemic earlier this year, but we have stepped into a rather unstable and unpredictable e environment. New challenges have emerged, and in some instances, are intensifying.
Polycrisis and Structural Shifts
4. Some of you may have heard of the term “polycrisis”. The World Economic Forum coined the term earlier this year to describe how events and risks may interact with one another to produce outsized effects. We saw this at play when the outbreak of the Russia-Ukraine war in February last year compounded the supply chain disruptions triggered by COVID-19, driving up the prices of energy, food and almost everything else. Global inflation soared, which led many countries to tighten their monetary policies. This, in turn, exposed weaknesses in the banking systems of some advanced economies, raising the risks of wider financial instability.
5. Tighter monetary policies worldwide have also caused the global economy to slow, as intended. The IMF predicts global growth to moderate from 3.5 percent in 2022 to 3 percent in 2023. Global trade is projected to slow in tandem, with the world merchandise trade volume expected to grow just 1.7 percent this year, compared to the 2.7 percent growth recorded last year.
6. These near-term challenges and headwinds to growth are taking place against a backdrop of major global structural shifts.
a. First, the multilateral open trading system is under pressure, with globalisation in retreat as security concerns take precedence over economic efficiency. Amidst rising geopolitical tensions, countries are embarking on measures to reduce their external exposure and mitigate vulnerabilities, real or perceived. For example, state subsidies are being deployed by the US, China and EU to incentivise strategic investments in-country. Protectionism is also on the rise. We saw this when countries imposed export restrictions during the pandemic, and more recently, because of food supply disruptions as a result of the war in Ukraine.
b. Second, we are witnessing the rapid rise of new technologies such as Generative Artificial Intelligence, which are disrupting industries and business models. As AI technology improves and is deployed more widely, it could disrupt jobs in areas such as marketing and sales, IT and engineering, and change the way we work and do business.
c. Third, to tackle the scourge of climate change, many countries around the world, including Singapore, are making the transition to net zero emissions. This will fundamentally transform our economy, affecting every industry from energy to financial services. It will also lead to greater competition among countries seeking to secure renewable energy and resources.
New Opportunities Amidst the Structural Shifts
7. While these challenges and structural shifts may seem daunting, they also present opportunities for Singapore and Singaporeans to seize. Let me share a few examples.
a. Amidst a more fractured global trading system, we can continue to distinguish ourselves as a trusted and reliable trading partner, working alongside like-minded countries. For example, throughout the COVID-19 pandemic, Singapore demonstrated our openness and reliability by continuing to facilitate global trade flows, including essential medical supplies. This was deeply appreciated by our trading partners.
b. At the same time, we can strengthen our role as a gateway to Southeast Asia, which is projected to grow faster than the global economy over the next five years. The region’s expanding middle class will provide a growing customer base for Singapore-based companies. This is particularly so for export consumer-facing products and services. The region also offers opportunities as an attractive alternative manufacturing base, as global supply chains restructure.
c. Meanwhile, new technologies like the AI will provide opportunities for us to grow our digital economy and establish thought leadership in this emerging area. One example is AI Verify which the Infocomm Media Development Authority (IMDA) has developed in consultation with companies. AI Verify is the world’s first AI governance testing framework and toolkit that helps organisations validate the performance of their AI systems against internationally-recognised AI governance principles.
d. Finally, the net zero transition presents opportunities for us to grow our green economy. The Singapore Green Plan 2030 was launched in 2021 to advance our national agenda on sustainable development. Under the Green Plan, we will drive new areas of growth in the green economy, such as in green financing, carbon services and trading, as well as sustainable tourism. One specific way in which the Government is supporting the development of the green economy is through the Green Economy Regulatory Initiative (GERI), which taps on a network of existing sandbox programmes to support businesses in seizing new green growth opportunities and developing green products and services.
Strengthening Key Enablers to Capture the New Opportunities
8. To capitalise on these and other opportunities, we introduced the Singapore Economy 2030 vision last year. This vision sets out how we will achieve long-term, sustainable growth by expanding our trade, capturing opportunities in manufacturing and services, and uplifting our enterprises and workers. Today, I would like to highlight two key enablers that we must focus on.
a. First, we must strengthen our economic connectivity to access new markets and customers, and bring in new knowledge and ideas. Singapore must resist the pressure to turn inwards and become more protectionist. We have always earned our living by remaining open, expanding our economic space, and staying connected to the world.
a. We will leverage our connectivity and strengthen Singapore’s appeal as a business hub for companies to locate their headquarters. For example, global traders that establish their headquarters here can orchestrate trade and tap on opportunities in sustainability such as the trading of biofuels in the region. In turn, their presence in Singapore will support our ecosystem of professional services firms and lead to good jobs for Singaporeans.
b. Furthermore, as global competition intensifies, we must continue to attract global talent and rainmakers with skills that complement our local workforce’s skills. We must also remain open to foreign investors and ideas that make us a cosmopolitan society.
c. We will also expand and deepen our economic connectivity through international partnerships to capture new opportunities. For example, our pioneering work in forging green and digital economy agreements with other countries will facilitate our businesses’ overseas trade and investments in these areas.
9. The second enabler is an agile workforce.
a. Arising from the structural shifts that I described earlier, we can expect existing jobs to be transformed at a faster pace than before, even as new jobs are being created.
i. For instance, as AI take over some tasks, workers have to move to higher value-added jobs. Interestingly, when we asked ChatGPT if it could take over the role of economists, it said, and I quote, “While AI can assist economists by processing vast amounts of data quickly, identifying patterns and generating hypotheses, human economists will still be needed to interpret the results, make critical decisions, and provide context, ethical considerations, and real-world insights that AI may not fully grasp”. This is the answer today. Next year, it might be a different answer. We will have to keep moving, and keep catching up with technology. So the good news for all budding economists in this auditorium is that your future job is likely to be augmented, and not displaced, by AI. But therein also lies the challenge – which is that economists will need to level up their skills to harness AI effectively. I see this as a challenge not just for economists, but also for many other jobs in the economy given the pervasiveness of AI.
b. We must invest in our workforce and ensure that it has the relevant skillsets to take on new tasks and roles. Workers will have to adopt a life-long learning mentality and constantly refresh and upgrade their skills. The Government will strongly support this endeavour.
i. As PM Lee said in his National Day Rally speech, the Government is looking at ways to equip Singaporeans with the skills to succeed as part of the Forward Singapore exercise. A recent initiative is the launch of CareersFinder feature on Workforce Singapore’s MyCareersFuture Portal, which will support Singaporeans in their job and training search by tapping on data and AI to personalise recommendations on occupations, courses and job openings.
ii. The Government has also taken steps to help workers acquire new skills to work in growth sectors. For example, to prepare companies and workers for the transition to a greener future, the Government has worked with tripartite partners to roll out training programmes at various levels, from broad-based courses such as Enterprise Singapore's Enterprise Sustainability Programmes for business executives to sector-specific programmes such as Workforce Singapore's Career Conversion Programme for sustainability professionals.
iii. Furthermore, to ensure that our training programmes remain relevant, MTI has partnered with SkillsFuture Singapore to set up a Green Skills Committee to bring together industry players and training providers to develop green skills in the local workforce that are relevant to the industry needs.
MTI Economist Service Scholarship and Academic Awards
10. Some of you may be wondering – how does the work of economists feature in all these? Within the public sector, economists play a crucial role in providing robust and objective economic analyses to support decision-making and policy formulation. The Economist Service has played this important role since its establishment in 2001, with nearly 100 economists currently deployed across the public sector.
11. As we strive towards the Singapore Economy 2030 vision in a more contested and challenging operating environment, the role of economists will become even more important, in identifying new opportunities, facilitating informed decisions about the trade-offs that the Government will need to make, as well as supporting the prioritisation of our scarce resources.
12. I am pleased to be presenting the Economist Service scholarship and academic awards to our budding economists. Congratulations to all the award recipients. I am confident that you will continue to do well and contribute meaningfully to Singapore in the many years ahead.
13. Thank you.