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Singapore’s deeper response to inflation must be to transform: PM Lee
BEYOND immediate measures such as a tighter exchange rate policy, Singapore’s deeper response to the global economic challenges that have emerged following the Covid-19 pandemic and the war in Europe must be to transform and be more productive, said Prime Minister Lee Hsien Loong on Monday (Aug 8).
“The basic reality is that international economic conditions have shifted. The world is not likely to return anytime soon to the low inflation levels and interest rates that we have enjoyed in recent decades,” he said in his annual National Day Message.
“Singapore’s deeper response to this shift must be to transform our industry, upgrade our skills and raise our productivity. Then our wages can go up higher than inflation, and Singaporeans can earn more in real terms year by year.”
In the pre-recorded message that was televised a day before Singapore celebrates National Day, PM Lee said the government stands ready to do more to help Singaporeans if things worsen, on top of existing support such as the S$1.5 billion package announced in June.
In the meantime, it has tightened the Republic’s exchange rate policy and strengthened the Singapore dollar to dampen imported inflation.
“Some measures have already been implemented, and more will be rolled out in the coming months,” said PM Lee, adding that the government is “doing everything necessary” to help Singaporeans cope with rising prices.
The inflationary threat comes as Singapore’s economy has emerged strongly from the pandemic, he noted, with the Russia-Ukraine war having aggravated supply chain disruptions and rising inflation brought by Covid-19.
Covid-19 has been a test of a generation, said PM Lee, and Singapore has emerged stronger and more united through the trial.
He thanked Singaporeans for trusting the government and doing the right thing “even when no one was checking” in the country’s battle against Covid-19 for the past 2-and-a-half years, pointing out that the high level of trust in the society is key to its success.
“We supported and took care of fellow citizens, contributing hand sanitisers in lifts, and delivering food packs to those quarantined at home. Our mutual trust in one another made all the difference,” he said.
But the road ahead, he said, will not be easy amid worsening relations between the United States and China that are unlikely to improve any time soon.
He reiterated the profound implications that Russia’s invasion of Ukraine has for the world and for Singapore. Apart from the deep hostility sown between Russia and other states, the invasion violates the fundamental principles of sovereignty and territorial integrity that are vital to Singapore’s existence.
The war in Europe will also affect regional security in the Asia-Pacific region, he said. “Already it has further strained China’s relations with the US, and with America’s partners in Asia. Singapore will be buffeted by intense rivalry and tensions in the region around us.”
The only way to deal with challenges in an increasingly troubled world, said PM Lee, is to stay united.
“We must look to our Total Defence, and maintain a strong and credible SAF (Singapore Armed Forces) and Home Team. We must also brace ourselves and be psychologically prepared that in the next decades our region may not be as peaceful and stable as it has been thus far.”
Beyond these immediate issues, however, PM Lee said that Singapore must look to the long term as well.
Referencing the venue where his message was recorded, PM Lee noted that Gardens by the Bay is on land that the government had begun reclaiming about 50 years ago. This year marks the gardens’ 10th anniversary, and works at Bay East Gardens, where the Founders’ Memorial will be sited, will start soon.
“This is how we do things in Singapore – always daring to dream, setting our sights on the next frontier, and searching for better solutions and fresh possibilities,” said PM Lee. “We look and plan ahead not just for the next 5 or 10 years, but for the next 30 or 50 years and beyond.”
The Urban Redevelopment Authority has launched a long-term plan review that could transform the way Singaporeans live, work and play, noted PM Lee, but he added that long-term plans are not just about physical infrastructure.
“We also need to sustain economic progress and social resilience – investing in our people to reach their full potential, taking care of our elderly and vulnerable, fostering a common identity and building a brighter future for our grandchildren and beyond,” he said.
“Each generation should be able to aim higher and bolder, to build a better Singapore than the one they inherited.”
He encouraged Singaporeans to participate in the Forward Singapore exercise launched by Deputy Prime Minister Lawrence Wong and his fourth-generation team.
Noting that Covid-19 will not be Singapore’s last crisis, PM Lee told Singaporeans not to fear despite the storms and turbulence that lie ahead.
“As long as we stay united and resolute, we can keep our nation peaceful and secure, build a more prosperous economy, and forge an inclusive society that all of us can belong to and can be proud of, for many years to come,” he said, as he wished Singaporeans a happy National Day.
Source: https://www.businesstimes.com.sg/government-economy/singapores-deeper-response-to-inflation-must-be-to-transform-pm-lee