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SINGAPORE, Feb 5 — Even though the Government acted quickly to support businesses through the pandemic-induced economic downturn, Singapore’s resources are finite and it cannot continue helping firms “indiscriminately”, said Trade and Industry Minister Chan Chun Sing.
Chan said today that government help would become more focused and targeted and would be aimed at helping businesses build capabilities and seize new opportunities as the economy begins to recover.
“Our resources are finite and we must use them in a judicious manner. This means that while we will continue to support our businesses, we will not be able to do so indiscriminately,” Chan said at a press briefing on trade agency Enterprise Singapore’s annual review.
The government’s focus last year was on ensuring businesses survive and saving jobs as the economy was hobbled by measures to curb the spread of Covid-19.
The two-month circuit breaker, which halted most economic activities in April and May last year, was especially detrimental.
Deputy Prime Minister and Finance Minister Heng Swee Keat will unveil Budget 2021 on February 16.
Analysts have said that even though Singapore’s economy is on the mend after weathering the Covid storm, the government will likely run a deficit in this year’s Budget, as hard-hit sectors and low-income households still need help.
But they noted that the support measures to be announced will likely be very targeted, to help those who need it the most.
Today, Chan said that the Government’s focus this year — with regard to supporting businesses — would move towards helping enterprises seize opportunities in new markets through new products and processes.
“It is not sufficient to play defensive by trying to preserve existing enterprises and jobs that are no longer competitive or relevant.
“The faster we help our companies and workers seize the new opportunities, the better the prospects for our companies and wage growth for our people,” he said.
When asked how the government would tailor its help amid this shift in its approach, Chan said that old business models would have to be transformed, and companies must capitalise on opportunities in new markets and by rolling out new products and services.
“Sometimes, it’s painful. We would have to exit some of the old business models because they are no longer relevant in a Covid world or a post-Covid world, and we’ll have to move forward and re-allocate the resources to help businesses to seize those other opportunities that are growing.”
Chan said that the information and communications, precision engineering and biomedical sectors continue to perform well despite the pandemic and would afford businesses opportunities to grow.
In contrast, businesses in mass-market tourism and aviation would need help to move into new areas.
Chan cited the example of how offshore marine companies are eyeing the development of wind turbines beyond their traditional oil rigs.
When asked whether there would be enough companies and manpower to serve these markets if demand does return, he said that markets are dynamic and would adjust accordingly.
Chan was also asked whether new capabilities built for the demands of a pandemic-stricken economy can be sustained after the health crisis ebbs.
He said that the government studies long-term trends that would continue even after the pandemic has passed.
These include getting companies aboard e-commerce and to leverage the rising demand in Asian markets for quality food and medical supplies.
For example, filters for surgical masks that can now be made in Singapore may also be used for other products, such as surgical gowns and personal protective equipment. Further afield, Singapore firms have been caught in the recent political turmoil roiling Myanmar.
On Monday, Myanmar made headlines when its army staged a coup and arrested its civilian leader, Aung San Suu Kyi, who came to power after the 2015 general election.
Asked for an update on the impact of the coup on Singapore companies with operations there, Chan said that it was still too early to give an assessment, because the situation is still unfolding and remains unclear.
“We are in constant contact with our businesses in Singapore that have operations in Myanmar and we will try to facilitate their engagement with the Myanmar authorities as much as possible.”
According to the World Bank, Singapore was the largest foreign investor in Myanmar last year, accounting for 34 per cent of overall approved investment.
ESG said today that about S$18 billion (RM54.7 billion) worth of loans were approved for 21,000 companies last year.
These were distributed through its loan programmes launched to cater for pandemic-related assistance.
Nearly nine in 10 (87 per cent) of these companies were micro and small enterprises from the wholesale trade, construction, manufacturing, professional services and retail sectors.
Png Cheong Boon, ESG’s chief executive officer, said that the approval rate for these loans was 90 per cent.
About 23,500 companies also made use of pandemic-related digital solutions under the Productivity Solutions Grant, which helps firms adopt technological solutions.
There were also 3,600 retailers and 19,000 food-and-beverage stores that started selling online through ESG’s e-commerce and food delivery packages.
Apart from measures instituted in response to Covid-19, 15,300 companies continued to transform their business last year by taking on projects to raise productivity and innovation, and pursue internationalisation.
This is higher than the 11,000 companies that embarked on such plans in 2019.
These efforts are expected to boost the value of Singapore’s economy by S$18.4 billion and create 22,200 professional, managerial, executive and technician jobs in the next few years, ESG said.
Even so, travel restrictions brought about by the pandemic meant that only 1,600 companies expanded overseas last year — a 38 per cent drop from 2019.
Asked how ESG would help Singapore companies internationalise given that travel restrictions remain in place, Png said that some firms expressed interest in restarting efforts to expand overseas at the start of this year.
Companies prioritised saving their business and Singapore-based jobs amid the uncertainties last year, with overseas expansion taking a back seat.
With renewed interest this year, Png said that companies may adopt a hybrid method that combines the extensive use of online meetings and selective travelling. — TODAY