how should government policies address the...
TRANSCRIPT
HOW SHOULD GOVERNMENT POLICIES ADDRESS THE IMPACT OF GLOBALISATION & DEGLOBALISATION ON SINGAPORE’S ECONOMY AND SOCIETY?
OH EE TING & VALERIE YIP HWA CHONG INSTITUTION (COLLEGE)
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Executive Summary
Through the free flow of trade, capital, and talent, globalisation has allowed Singapore to
overcome her resource and geographical constraints to rapidly transition into a cosmopolitan,
prosperous city-state.
However, rising anti-globalisation sentiments have swept countries across the globe, with many
turning inwards instead of upholding economic liberalism. This will have adverse consequences
on Singapore which has been heavily reliant on globalisation as a driving force for strong
economic growth.
Apart from deglobalisation, new challenges such as the divided views of various countries on
the issue of globalisation, the Fourth Industrial Revolution, and the ageing population are
creating new complexities to how Singapore should approach globalisation.
How should Singapore respond to the impacts of these counteracting forces? Amidst such
volatile conditions, how should Singapore continue to stand its ground in the world order?
Indeed, Singapore must continue to adapt to stay afloat amidst the tide of global uncertainties.
In Section 5, we will discuss a four-pronged approach targeted at mitigating the impacts arising
from the interaction of globalisation and deglobalisation trends: 1) Improving the quality and
volume of free trade with Singapore, 2) Remaining an attractive FDI destination, 3) Reducing
social tension between foreigners and locals, and 4) Reducing income disparities within society.
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In Section 6, a two-step approach is adopted in order to shape Singapore’s place in the world
order. Firstly, Singapore must continue to maintain a quality labour force through upgrading its
local workers and attracting highly-skilled workers that can provide invaluable expertise to our
knowledge-based economy. Secondly, Singapore must improve connectivity and cooperation
with other countries by maintaining good relations with other countries, especially those in
regional alliances like ASEAN. She must continue to be a key diplomatic player in the
international arena to uphold its interests in a fractured world.
(293 words)
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Table of Contents
Executive Summary 2
1. Our Past: The Economic Success of Singapore 5
2. A Shift Towards Deglobalisation 7
3. Trade-offs of Deglobalisation 9 3.1. Slower Economic Growth 9 3.2. Reduced Capital Flow 10 3.3. Reduced Talent Flow 10 3.4. Sluggish Domestic Demand 10 3.5. Fall in Employment Rate 11
4. Globalisation Not The Same Anymore 12 4.1. The Polarised View of Globalisation 12 4.2. The Fourth Industrial Revolution 13
5. Managing Potential Impacts of Globalisation and Deglobalisation 15 5.1. Enhancing Trade as An Engine of Growth 15 5.2. Attracting Foreign Direct Investment by Taking Advantage of the Current Global Climate 18 5.3. Reducing the Social Tension 19 5.4. Leveraging Technology to Reduce the Income Gap 21
6. Our Future: Shaping Singapore’s Place in the World Order 25 6.1. A Quality Labour Force 25 6.2. Improved Connectivity and Cooperation with Other Nations 29
7. Conclusion 32
8. Bibliography 33
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1. Our Past: The Economic Success of Singapore
Singapore’s economic success over the past five decades was mainly driven by globalisation. 1
The increased integration of economies, through the movement of trade, capital, and talents
across borders, has transformed Singapore drastically. (Figure 1 & 2) 2
Figure 1: Singapore in the 1800s 3 Figure 2: Singapore in the present 4
1 Bhaskaran, M. (2018). Getting Singapore In Shape: Economic Challenges And How To Meet Them. https://www.lowyinstitute.org/publications/getting-singapore-shape-economic-challenges-and-how-meet-them-0 (16 May 2019). Singapore has achieved rapid economic growth to transition from a struggling, developing country to the First World developed city-state it is today. 2 International Monetary Fund. (2008). Globalisation: A Brief Overview. https://www.imf.org/external/np/exr/ib/2008/053008.htm (18 May 2019). 3 Hidden Singapore. (2011). Clarke Quay and its history. https://hiddensingapore.com/2011/11/11/clarke-quay-and-its-history/ (18 May 2019). 4 Khanna, P. (2014). Globalisation: Should Every Country Be Like Singapore?. https://www.paragkhanna.com/home/globalization-should-every-country-be-like-singapore (18 May 2019).
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Evidently, her economic success is largely due to her global connectivity (Figure 3). 5
Figure 3: As one of the most connected cities, Singapore has managed to reap the
benefits of globalisation through international labour, capital, and trade flows 6
However, anti-globalisation sentiments threatens Singapore’s position as a global trade hub.
Therefore, amidst the pulling forces of globalisation and deglobalisation, we seek to address the
impacts on Singapore’s economy and society. In this essay, we will also propose measures to
navigate these treacherous waters to maintain Singapore’s world standing.
5 International Monetary Fund. (2017). IMF Executive Board Concludes 2017 Article IV Consultation with Singapore. https://www.imf.org/en/News/Articles/2017/07/28/pr17306-imf-executive-board-concludes-2017-article-iv-consultation-with-singapore (19 May 2019). Her global connectivity has allowed a flourishing exports-oriented industry. Political stability and a favourable business environment have enabled a substantial flow of Foreign Direct Investment (FDI). Moreover, her openness to labour has also allowed it to address a manpower crunch amidst greying demographics. These contributed to her success, allowing her to enjoy one of the highest GDP per capita of US$52,961. 6 Today Singapore. (2016). Singapore the most connected country in the world. https://www.todayonline.com/singapore/singapore-most-connected-country-world (9 May 2019).
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2. A Shift Towards Deglobalisation
Due to the wave of populism, deglobalisation has culminated itself in four major trends (Figure
4). 7
Figure 4: Deglobalisation is a genuine threat as seen by the slow world trade growth and
growth in the international migrant stock, reduced flow of money crossing borders and
increased protectionist measures in the world today 8
7 CNA. (2018). Commentary: Global elites are overlooking ‘globalisation’. https://www.channelnewsasia.com/news/commentary/trade-globalisation-nationalism-elites-overlooking-far-right-10828906 (18 May 2019). 8 Groom, B. (2018). What is deglobalisation?. https://www.rsm.global/insights/finding-opportunity-in-change/what-is-deglobalisation (18 May 2019).
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A notable example would be the US-China trade war (Figure 5). 9
Figure 5: The US-China trade war 10
The extensive amount of tariffs has led to inefficiencies in global resource allocation and slower
global economic growth, impeding Singapore’s economy.
9 Wallace, C. (2019). US-China Trade War Hurting The Global Economy. https://www.forbes.com/sites/charleswallace1/2019/03/20/us-china-trade-war-hurting-the-global-economy/#226cc8445756 (18 May 2019). 10 BBC. (2019). A quick guide to the US-China trade war. https://www.bbc.com/news/business-45899310 (18 May 2019).
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3. Trade-offs of Deglobalisation
3.1. Slower Economic Growth
a) Reduced Exports
Exports account for 173% of Singapore’s GDP. Deglobalisation will have devastating effects 11
on Singapore’s economy through reduced trade volume. While small states like Singapore may
not be on the front line, collateral damage will occur. 12
b) Disruptions to Global Supply Chains
Deglobalisation will make imports of raw materials and intermediates more costly, limiting
Singapore’s ability in meeting its basic needs and to value-add to manufacture final goods
available for domestic consumption and exports. 13
11 Singapore Business. (2018). Singapore could be the first casualty of a looming trade war. https://sbr.com.sg/economy/in-focus/singapore-could-be-first-casualty-looming-trade-war (18 May 2019). 12 Channel NewsAsia. (2018). The Big Read: US-China trade war not hurting Singapore much yet, but beware the long sting in the tail. https://www.channelnewsasia.com/news/singapore/us-china-trade-war-effect-on-singapore-tariffs-eu-canada-mexico-10491430 (9 May 2019). It is estimated that a "modest" 0.1 percent of our exports are affected by the tariffs. 13 Today Singapore. (2018). US-China trade war to drag on Singapore’s economy: MAS. https://www.todayonline.com/singapore/us-china-trade-war-drag-singapores-economy-mas (18 May 2019). China’s integral position in the global supply chain means that over 40 percent of her exports can be traced to external partners like Singapore. As both of her two most important trading partners are caught in a headlock, domestic manufacturing industries and export-dependent industries in Singapore will be adversely affected.
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3.2. Reduced Capital Flow
Foreign Direct Investment (FDI) is likely to fall as some countries pursue nationalistic
campaigns. Greater controls on capital outflow by these countries will limit Singapore’s 14
potential and long-term growth. For instance, the US is one of the top source countries of 15
S$34,267.4 million of Singapore’s FDI.
3.3. Reduced Talent Flow
Deglobalisation will see a diminished foreign talent inflow. This will reduce Singapore’s average
growth rate as foreign talent brings new expertise to complement the skills of locals in order to
revitalise our industries and growth. 16
3.4. Sluggish Domestic Demand
Amidst the uncertainties caused by deglobalisation, households have held back spending,
dampening economic growth and leading to a fall in material standard of living. 17
14 CNA. (2018). Commentary: Global elites are overlooking ‘globalisation’. https://www.channelnewsasia.com/news/commentary/trade-globalisation-nationalism-elites-overlooking-far-right-10828906 (18 May 2019). Local companies are encouraged to keep more capital and intellectual property at home. 15 Department of Statistics Singapore. (2019). Foreign Direct Investment. https://www.tablebuilder.singstat.gov.sg/publicfacing/createDataTable.action?refId=12644 (5 May 2019). 16 Ng, Y.K. (2018). Commentary: Expats, foreign talent and immigration make Singapore economically better off. https://www.channelnewsasia.com/news/commentary/commentary-expats-foreign-talent-and-immigration-make-singapore-10766870 (18 May 2019). 17 Bhaskaran, M. (2019). MySay: Singapore in 2019: Get Ready For A Rough Ride. https://www.theedgemarkets.com/article/mysay-singapore-2019-get-ready-rough-ride (18 May 2019).
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3.5. Fall in Employment Rate
With economic growth being impeded, there will be a substantial loss in jobs, with the
manufacturing sector facing immediate threat, as it accounts for 15% of our workforce 18
18 InterNations. (2019). Economy of Singapore. https://www.internations.org/singapore-expats/guide/29457-economy-finance/the-economy-of-singapore-16045 (18 May 2019).
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4. Globalisation Not The Same Anymore
What is more worrying is not deglobalisation, but the hidden complexities behind this
multifaceted problem.
4.1. The Polarised View of Globalisation
Globalisation has divided world leaders, with some countries like China championing for
globalisation while others like the US are questioning its value. This has caused Singapore to 19
be caught in the crossfire.
Back home, opinions are also split, especially regarding foreign workers. Since the mid-2000s,
further liberalisation has accelerated the inflow of foreigners (Figure 6).
Figure 6: Population of non-residents (foreigners) represents one-third of Singapore’s population 20
19 The Straits Times. (2019). Taking Singapore forward in a fast-changing world. https://www.straitstimes.com/singapore/taking-singapore-forward-in-a-fast-changing-world (16 May 2019). 20 The Straits Times. (2015). Singapore population report: 10 things to know about citizens, PRs, babies and more. https://www.straitstimes.com/singapore/singapore-population-report-10-things-to-know-about-citizens-prs-babies-and-more (4 May 2019).
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However, while Singapore benefits from the increase in productive capacity, Singaporeans are
unhappy with the negative impacts on jobs, infrastructure, and the environment. 21
This poses a challenge to Singapore as not only is the support for globalisation diluted in the
global arena, but views are also polarised locally.
4.2. The Fourth Industrial Revolution
The fourth industrial revolution is the digital revolution (Figure 7). 22
Figure 7: The Fourth Industrial Revolution
21 Mothership. 2018. S’pore’s income inequality is made worse by elitist values & systematic elitism. https://mothership.sg/2018/10/kenneth-paul-tan-income-inequality-sg-elitism/ (4 May 2019). Singaporeans, not generally known to be xenophobic, have started to complain about overcrowding in their city and breakdowns in their transport infrastructure, often suggesting that the immigration policy is to be blamed for this. The accelerated presence of foreigners, most of whom are in Singapore on temporary terms, has the effect of hollowing out the Singaporean core. In the near future, a highly divided society may become disenchanted, as many feel excluded from Singapore’s success story for different reasons. 22 World Economic Forum. (2019). 3 ways to be a good leader in the Fourth Industrial Revolution. https://www.weforum.org/agenda/2019/01/the-fourth-industrial-revolution-needs-new-forms-of-leadership/. (19 May 2019).
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While it has revolutionised communications and improved the efficiency of organisations,
Singapore is faced with a large number of jobs being displaced. 23
Moreover, labour-saving technology often displaces low-skilled workers. This worsens the 24
current income inequality in Singapore (Figure 8).
Figure 8: Gini coefficient increases as Singapore becomes more open
Thus, it is definitely a new complexity of globalisation that Singapore has to navigate through.
23 Today Singapore. (2018). S’pore to be worst hit by job displacement as tech disrupts region’s labour markets: Study. https://www.todayonline.com/singapore/spore-be-worst-hit-job-displacement-skills-mismatch-tech-disrupts-regions-labour-markets (16 May 2019). On one hand, Artificial Intelligence (AI) and automation have already streamlined accounting, e-commerce, and business intelligence. On the other hand, Oxford Economics also found that Singapore will have to confront the biggest mismatch between skills and jobs created among the countries in the region. Data showed that about one-fifth of Singapore’s full-time equivalent workforce (20.6 per cent) will have their jobs displaced by 2028. 24 TechCrunch. (2017). Is Technology Contributing To Income Inequality. https://techcrunch.com/2017/03/29/is-technology-contributing-to-increased-inequality/ (19 May 2019).
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5. Managing Potential Impacts of Globalisation and Deglobalisation
Singapore needs to be prepared to face these new uncertainties, especially when global flows
of capital, trade, and talent remain an important avenue for growth. Hence, we propose a
four-pronged measure for Singapore to address the impacts of both globalisation and
deglobalisation.
5.1. Enhancing Trade as An Engine of Growth
Due to Singapore’s reliance on trade, we need to expand our efforts to continue to enjoy the
benefits, amid the push-and-pull between globalisation and deglobalisation.
a) Diversification to Reduce The Contagion Effect
Expanding Singapore's network of free trade agreements (FTAs) "ensures the diversification
of our markets and supply chains, to not overly rely on any one particular market"
- Minister for Trade and Industry Chan Chun Sing 25
As mentioned, Singapore has to source for other trading partners. Currently, Singapore has 26
already been expanding her FTA networks. 27
25 The Business Times. (2019). Singapore must diversify and not overly rely on any market: Chan Chun Sing. https://www.businesstimes.com.sg/government-economy/singapore-must-diversify-and-not-overly-rely-on-any-market-chan-chun-sing (4 May 2019). 26 World’s Top Exports. (2019). Singapore’s Top Trading Partners. http://www.worldstopexports.com/singapores-top-import-partners/ (4 May 2019). Singapore exports 12.2% of its goods and services to China and 7.7% of that to the United States. 27 Mr Chan named the Comprehensive and Progressive Agreement for Trans-Pacific Partnership which entered into force last year and marked Singapore's first agreement with Canada and Mexico; the EU-Singapore Free Trade Agreement and Investment Protection Agreement, recently consented to by the European Parliament; and the Regional Comprehensive Economic Partnership (RCEP), which the 16 partners hope to conclude this year.
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However, Singapore can improve her efforts by turning to emerging economies, whose
persistent growth amidst the uncertainty of deglobalisation signals that they would be reliable
partners for Singapore to diversify (Figure 9). 28
Figure 9: Singapore should expand her FTA networks to
more of these emerging economies
The Business Times. (2019). Singapore must diversify and not overly rely on any market: Chan Chun Sing. https://www.businesstimes.com.sg/government-economy/singapore-must-diversify-and-not-overly-rely-on-any-market-chan-chun-sing (4 May 2019). 28 Focus Economics. (2018). Emerging Markets Economic Outlook 2018 and 2019. https://www.focus-economics.com/blog/emerging-markets-2019-economic-outlook (6 May 2019).
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b) Improvement of Existing Trade Agreements
Existing trade agreements mainly focus on removing tariff barriers. However, non-tariffs barriers
are transparent obstacles which disproportionately represent hidden protectionist measures in
almost every country (Figure 10). 29
Figure 10: The Average Level of Restrictiveness Imposed on Imports by Tariff and Non-tariff Barriers
Even in ASEAN, non-tariff measures remain as a huge barrier to free trade (Figure 11).
Figure 11: High percentage of Non-tariff Measures in ASEAN
29 International Centre for Trade and Sustainable Development. (2016). Trade Policies and Sustainable Development in the Context of Global Value Chains.
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In view of deglobalisation, Singapore needs to strengthen current trade agreements, such as
Regional Comprehensive Economic Partnership (RCEP), to focus on the transparent removal of
non-tariff barriers and make them measurable so that nations can settle their disputes in front of
a reputable court.
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5.2. Attracting Foreign Direct Investment by Taking Advantage of the Current Global
Climate
Despite the uncertainty of deglobalisation, Singapore can potentially gain from the relocation of
production facilities. This could yield positive spillover effects for Singapore’s economy in 30
terms of trade-related services like infrastructure, trade and transportation. Although relocation 31
has been to countries with low labour costs, Singapore can attract the regional headquarters of
these firms.
Singapore can achieve this through maintaining favourable business conditions. She should
also maintain positive international relations, especially with escalating US-China trade
tensions. Singapore must remain neutral as picking either one of its two important partners
would only make her suffer ultimate losses.
30 EDB Singapore. (2019). U.S.-China trade war boosts fast-growing Southeast Asia. https://www.edb.gov.sg/en/news-and-events/insights/headquarters/us-china-trade-war-boosts-fast-growing-southeast-asia.html (9 May 2019). 31 Today Singapore. (2018). US-China trade war to drag on Singapore’s economy: MAS. https://www.todayonline.com/singapore/us-china-trade-war-drag-singapores-economy-mas (9 May 2019).
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5.3. Reducing the Social Tension
It is important to mitigate societal tensions if Singapore wishes to maintain open.
Currently, one of the measures by the government is to impose a foreign worker levy which has
been gradually increasing. (Figure 12).
Figure 12: Foreign Worker Levy has been Increasing 32
However, in order to truly mitigate this problem to benefit from globalisation, the government
needs to achieve a mindset shift for Singaporeans to accept the foreigners.
32 Chan K.(2014). Foreign Worker Levy Increase in Singapore. https://www.slideshare.net/chanbingruikenneth/increase-in-foreign-worker-levy (5 May 2019).
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a) Legitimising immigrants as “Singaporeans”
The first step to integration is recognising immigrants as valuable assets to society. Ethnic
categories should be broadened beyond the standard “Chinese, Malay, Indian, Other” This 33
would guide Singaporeans in their perceptions of immigrants who lie outside these prescribed
racial classifications to be an integral part of our community. We must educate Singaporeans to
celebrate her vibrance and cultural diversity.
33 Kathiravelu, L. (2019). Rethinking Singapore’s approach to diversity and social inclusion. https://www.todayonline.com/commentary/re-thinking-singapores-approach-diversity-and-social-inclusion (18 May 2019).
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b) Working with Non-Governmental Organisations (NGOs) to Encourage a Shift in
Mindset
Singapore’s stance on immigration policy has always been a market-driven, economic-based
one. However, with 1.4 million foreigners in Singapore, there is a pressing need for us to
integrate the migrant workers socially. A more targeted approach is essential for a mindset 34
shift (Figure 13). 35
Figure 13: There are programmes aim for social integration,
but there is still room for improvement
34 The Straits Times. (2016). A helping hand in a foreign land. https://www.straitstimes.com/singapore/kudos-to-ngos-that-help-spores-migrant-workers (5 May 2019). 35 The Straits Times. (2016). Locals and foreign workers bond over games. https://www.straitstimes.com/singapore/locals-and-foreign-workers-bond-over-games (5 May 2019). Although there are many ad-hoc projects that are aimed at integrating the migrant workers, they are largely ineffective. Firstly, the locals that join the bonding programmes are volunteers, who are most likely not the cause of social tensions. Secondly, these projects are not on a regular basis, which defeats the purpose of social integration, as an integration would take more than a one off project. Lastly, these programmes are not well advertised, which makes most Singaporeans unaware of their existence. Hence, a more targeted project is needed to truly integrate these migrant workers.
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Hence, we propose the government to work closely with NGOs like Migrant Workers’ Centre
who are most familiar with the emotional needs of foreigners, to implement large-scale schemes
that include foreigners and locals on a regular basis. This is to push for greater understanding
by locals through social mixing.
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5.4. Leveraging Technology to Reduce the Income Gap
Apart from current efforts, the government needs to recognise the opportunity that the gig
economy provides. This allows us to match meaningful employment to members that possess 36
a specific skill of lower-income households, so that they may achieve social mobility. 37
a) Giving Gig Workers a Name
Gig economy is a phenomenon caused by disruptive technology (Figure 14). 38
Figure 14: An overview of what gig workers do 39
An increasing number of workers are joining it, representing 8 to 10 percent of the whole
workforce (Figure 15). 40
36 Currently, through the progressive tax system and tax rebates for lower-income households, the government is actively trying to reduce the income gap. 37 For example, adults that possess a driving license can be matched up to Grab or Gojek to work as on-demand cab drivers. Additionally, retrenched and unemployed workers are able to quickly find a gig under Foodpanda, UberEats or Deliveroo due to the high demand of these delivery services in Singapore today. 38 The gig economy is a temporary work market with short term engagements of workers. Examples would be Grab drivers, website developers, or any short term digital-enabled jobs. 39 San Franciso Business Times. (2015). Can the ‘1099’ labor model survive a collision between Uber and its drivers? https://www.bizjournals.com/sanfrancisco/print-edition/2015/10/02/driving-the-gig-economy-off-the-road-can-the-1099.html (9 May 2019). 40 The Straits Times. (2017). Freelance jobs in Singapore on the rise. https://www.straitstimes.com/singapore/manpower/freelance-jobs-in-singapore-on-the-rise (6 May 2019).
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Figure 15: An Increasing Number of Gig Workers Observed in Singapore
With the rising number of freelance workers, the need to “recognise” them also increases.
Providing a clear definition for “gig workers”, on top of the “employed” and “self-employed”, is
the first step of leveraging this opportunity.
b) Giving the Gig Workers a Right
Freelance workers lack financial security. A financial safety net should be set up to provide
benefits like health insurance and retirement savings. The government can enroll all workers
under a centralised system GigFund to provide them with additional bonuses. This could give 41
lower-income workers a much needed boost. 42
41 Companies hiring “gig workers” like Uber or Grab can be mandated by the government to make retirements savings contributions under the GigFund so that gig workers may save up for a rainy day. 42 Lower-income workers may be able to find employment more easily in gigs like food delivery, private-hire cars or insurance due to the fluid nature of the gig. By providing a financial safety net and more benefits, this will incentivise and also protect lower-income workers from being exploited.
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c) Giving the Gig Workers a Platform
Indeed, there are various platforms for gig workers to choose from. However, this is inefficient 43
as the profile of a worker’s gig experience is not transferable.
Therefore, the government needs to deal with the structural discrepancies between gig
platforms. We propose a centralised platform that keeps track of a gig worker’s work history,
past feedback from employers, and his skill set . This enables the workers to take their 44
“reputational history” between gig economy platforms and to bolster their employment chances.
We also recommend incorporating SkillsFuture onto the platform to record gig workers’ 45
training experiences for better evaluation by employers.
Ultimately, we hope to offer opportunities to the gig workers in our economy, through official
recognition, providing a savings scheme, and a fully integrated system. This will also allow
lower-income workers to take advantage of the gig economy that poses lower barriers to entry
and reduce the income gap.
43 Today Singapore. (2019). Contracts can be a career: Finding a place in the gig economy. https://www.todayonline.com/singapore/contracts-can-be-career-finding-place-gig-economy (6 May 2019). A multitude of online platforms cater to gig workers. For example, Upwork allows workers to bid for projects, for instance, while Hubstaff enables companies to find talent across the globe. Specialised platforms such as 99designs for designers, AsiaWriters for writers and MomoCentral or Toptal for software developers offer jobs for people with specialised skills. 44 This platform needs to be a generalised one, to be used across all disciplines. This makes it easy for the government to monitor, so that these workers are not platform-dependent. 45 Wired. (2018). The government's Good Work Plan leaves the gig economy behind. https://www.wired.co.uk/article/good-work-plan-uk-gig-economy (5 May 2019).
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6. Our Future: Shaping Singapore’s Place in the World Order
Singapore needs to improve her global competitiveness and world reputation.
6.1. A Quality Labour Force
Establishing a quality labour force that is ever-ready for changes in the economy will put
Singapore far ahead of her global competitors. The availability of both local and global talents
will continue to attract FDI, to provide employment opportunities and to stimulate growth.
a) Training our Local Talent
Singapore must continue to stay committed to deepening the capabilities of local talent.
ai) Expansion of Our Small-Medium-Enterprises (SMEs)
SMEs employ up to 70 percent of our workforce, highlighting the need to improve their viability
to benefit Singapore’s economy. 46
46 Enterprise Singapore. (2018). Bridging the SME talent gap. https://www.enterprisesg.gov.sg/media-centre/news/2018/april/bridging-the-sme-talent-gap (5 May 2019).
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Currently, there is an extensive number of schemes to support firms. (Figure 16) 47
Figure 16: 3 Steps to Go Digital Programme is one of the initiatives to ramp up SMEs
which improves workers and equipment capability 48
However, SMEs need to go further and venture abroad. More targeted approaches like the 49
Scale-up SG programme are needed, to offer knowledge and assistance beyond monetary help
to achieve a mindset change and deepened capabilities. 50
47 The Straits Times. (2019). Taking Singapore forward in a fast-changing world. https://www.straitstimes.com/singapore/taking-singapore-forward-in-a-fast-changing-world (5 May 2019). 48 Infocomm Media Development Authority. (2019). Retail Industry Digital Plan for SMEs. https://www.imda.gov.sg/retail-idp (9 May 2019). 49 Wang, S. (2018). Bridging the SME talent gap. https://www.enterprisesg.gov.sg/media-centre/news/2018/april/bridging-the-sme-talent-gap (18 May 2019). 50 Lee, J. (2019). Singapore Budget 2019: Enterprise Singapore to launch Scale Up SG Programme for startups. https://www.businesstimes.com.sg/government-economy/singapore-budget-2019/singapore-budget-2019-enterprise-singapore-to-launch-scale (18 May 2019).
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aii) Building Cultural Literacy
70% of international endeavours fail due to cultural differences. Hence, SMEs must learn to 51
cater to the distinctive taste and preferences of foreign consumers. Cultural training modules
should be made centralised and necessary across all SMEs.
aiii) Increasing Productivity Through Mandatory Entrepreneurship Education
Today’s VUCA world compels Singaporeans to have an entrepreneurial global outlook. (Figure
17)
Figure 17: What is VUCA 52
In the fast-changing market, SMEs’ leaders need to be creative and comprehensive of multiple
perspectives. Mandatory entrepreneurship education will help to shift risk-averse mindsets into
one that leverage risks as opportunities.
51 Hegarty, K. (2018). How Singapore companies can grow globally in a post-globalisation world. https://sbr.com.sg/economy/commentary/how-singapore-companies-can-grow-globally-in-post-globalisation-world (18 May 2019). 52 Chandramana, S. (2016). VUCA Model. https://www.researchgate.net/figure/The-VUCA-Model_fig5_315116943 (18 May 2019).
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b) Attracting our Global Talent
Singapore must continue to welcome high-skilled foreign talent to tap on their expertise,
considering our population constraints.
bi) Ensuring Economic Opportunities For the Highly Skilled
Besides a high wage premium, opportunities for growth and upskilling must be ample to retain
these talents that value personal development. Companies should design favourable work 53
environments to create these opportunities.
bii) Building Social Infrastructure
The sheer number of foreigners has increased the burden on our transport facilities. Hence, 54
the government must continue to increase the capacity and quality of social infrastructure, from
transport to housing, to abate the fears of the local populace.
biii) Exposing Local Workers to Differences in Cultures
Singapore needs to create a work climate that is understanding, not only to foreigners’ culture,
but also the differences in global business protocol. Employers should blend diversity
management and inclusiveness to embrace diversity. 55
53 Deloitte Insights. (2012). Talent development: A key to attracting and retaining highly skilled people in your industry. https://www2.deloitte.com/insights/us/en/topics/talent/talent-development-a-key-to-attracting-and-retaining-highly-skilled-people-in-your-industry.html (9 May 2019). 54 Channel NewsAsia. (2018). Commentary: Expats, foreign talent and immigration make Singapore economically better off. https://www.channelnewsasia.com/news/commentary/commentary-expats-foreign-talent-and-immigration-make-singapore-10766870 (9 May 2019). 55 Mayhew R. (n.d.) Strategies to Attract Foreign Talent. https://smallbusiness.chron.com/strategies-attract-foreign-talent-31091.html (9 May 2019). For example, there can be employer-sponsored language instruction and training or events that expose employees to the differences in global business culture and protocol.
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6.2. Improved Connectivity and Cooperation with Other Nations
In order to shape Singapore’s place internationally, Singapore must hold its weight through two
key approaches: 1) maintaining good relations with other nations and 2) playing an active role in
negotiating global agreements.
a) Fostering Relationships with Our Regional Partners
As a small state, Singapore must lend the weight of its neighbours with aligning interests to
make a greater impact on the global stage.
ai) Economic Relationships
With the major shift in economic weight towards Asia, this will shape Singapore’s place in the
global economic realm. For instance, the RCEP is one promising development. However, 56 57
while the diversity of ASEAN makes it a pivotal economic bloc, Singapore must continue to be a
leader in uniting interests among member nations to prevent cultural or political tensions.
56 Today Singapore. (2018). Singaporeans urged to prepare for shift in economic weight towards Asia, new technologies and ageing. https://www.todayonline.com/content/singaporeans-urged-prepare-shift-economic-weight-towards-asia-new-technologies-and-ageing (19 May 2019). 57 Channel NewsAsia. (2018). Talks on RCEP trade pact taking 'much longer than usual', but set for 2019 completion: PM Lee. https://www.channelnewsasia.com/news/singapore/talks-rcep-longer-than-usual-2019-completion-lee-hsien-loong-10930098 (19 May 2019). Being the world’s largest free trade pact involving 16 nations, the RCEP is makes up one third of global GDP, showing the shift in economic focus to Asia.
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aii) Political Relationships
Collaboration between countries allows us to align our political interests, such as through
ASEAN Smart Cities Network. (Figure 18) 58
Figure 18: ASEAN Smart Cities Network enables collaboration between 26 cities to
achieve the goal of smart, sustainable development
The utilisation of smart technology will improve connectivity, building a regional ecosystem to
interwove the interests of ASEAN cities. This promotes a symbiotic, peaceful relationship. 59
58 Association of Southeast Asian Nations. (2018). ASEAN Smart Cities Network. https://asean.org/asean/asean-smart-cities-network/ (19 May 2019). 59 Balakrishnan, V. (2018). Towards smart cities in ASEAN. https://www.businesstimes.com.sg/hub/asean-singapore-2018/towards-smart-cities-in-asean (18 May 2019).
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b) Establishing Our Place Internationally
Singapore must continue to be an active, well-reasoned voice globally. Despite our small size, 60
we can continue to contribute significantly to global summits through offering constructive
recommendations. This displays her commitment to maintaining a rule-based international 61
order that all countries must abide by and her unwavering desire to protect her own interests. 62
60 Today Singapore. (2017). Small states like Singapore must stand up and be counted. https://www.todayonline.com/singapore/standing-firm-singapores-core-foreign-policy-principles (18 May 2019). 61 For example, Singapore made significant contributions in the United Nations Convention on the Law of the Sea. Singapore formed a coalition of landlocked countries to defend their similar interests. Lee, H.L. (2018) Securing Singapore’s place in the world. https://www.straitstimes.com/opinion/securing-singapores-place-in-the-world (18 May 2019). 62 Lim, A. (2019). Vivian lists three ways for Singapore to stay relevant. https://www.straitstimes.com/politics/vivian-lists-three-ways-for-singapore-to-stay-relevant (18 May 2019).
33
7. Conclusion
The new complexities of globalisation will have extensive effects on Singapore. It is imperative
to take a targeted, multi-pronged approach to manage the multi-faceted impacts on our
economy, as well as our society.
Singapore should continue her efforts to improve trade agreements and to integrate foreigners
in order to reduce social tensions. She must also redefine threats as opportunities like attracting
regional centres of MNCs in the face of US-China trade war and leveraging on disruptive
technologies.
In addition, Singapore should continue with her diplomacy efforts to forge mutually beneficial
partnerships with other countries by remaining nimble. Also, she needs to be a judicious voice in
the international community to establish her global reputation. With these efforts, she would be
able to shape her place in the world order.
With her resilience and far-sightedness, Singapore will be able to thrive, even as a little red dot,
in the overlapping waves of globalisation and deglobalisation.
34
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