Abu Dhabi, UAESaturday 24 October 2020

Singapore to invest more than $14bn to support research and innovation

The nation will invest in areas such as health and biomedical sciences, climate change and artificial intelligence

Singapore faces its biggest economic contraction since 1965 and the government says the most urgent task is job creation EPA
Singapore faces its biggest economic contraction since 1965 and the government says the most urgent task is job creation EPA

Singapore is positioning itself for a post-coronavirus world with massive investment in innovation, over and above the immediate support it is giving to help the economy rebound from possibly its worst downturn on record.

The government will set aside more than S$20 billion ($14.3bn/Dh52.6bn) to support research in “high impact areas” such as health and biomedical sciences, climate change and artificial intelligence, Deputy Prime Minister Heng Swee Keat said on Saturday. The investment is part of a five-year research and development plan, which is being finalised.

“All countries, including us, are providing immediate support, to provide a cushion,” said Mr Heng, who is also finance minister. “But we are going further, investing to give everyone a springboard, to bounce back from this even stronger. In Singapore, we never stop thinking of tomorrow.”

Mr Heng’s speech is the final one in a series of ministerial broadcasts as the nation girds for a coming election. On Friday, the city-state entered the second phase of reopening its economy after a lockdown to avert the coronavirus’ spread.

With Singapore’s economy facing its biggest contraction since independence in 1965, and employment sliding in the first quarter by the largest amount on record, Mr Heng said the most urgent task is job creation. Officials have pledged to create 100,000 jobs and training opportunities to help cushion the blow.

“We are doing our best to keep viable businesses afloat, helping them hold on to their workers for as long as possible, so that you can preserve your livelihoods,” Mr Heng said, while also highlighting that it was the first time the government has provided direct cash support to self-employed workers on a large scale.

One of the most export-dependent economies in the world, Singapore has no choice but to increase its export levels coming out of the crisis, said Mr Heng.

“We are finished if we close up,” he said.

Mr Heng stressed the government’s commitment to infrastructure investment, including greener projects and food security initiatives.

A series of industry-led groups assembled by the government will explore new opportunities in areas such as robotics, e-commerce and supply chain digitisation, he said.

The stimulus and investment pledged is a particular shock for Singapore, which is traditionally prudent with its fiscal spending. Mr Heng acknowledged that he “never expected to put up four budgets, one after another, within just 100 days” for a total of almost S$100bn, and more than half financed from past reserves.

“We are very grateful to our past generations, whose blood, sweat and tears left us with these deep financial reserves,” said Mr Heng. “So, let us remember – once we have recovered from this crisis, our generation must build back better.”

It is only the second time that Singapore has drawn down on its national savings. In 2009, it received approval to use S$4.9bn of reserves to help fund the government’s support package during the global financial crisis. The government paid back the amount drawn to the reserves in 2011 after the crisis passed.

Mr Heng noted that Singapore has remained one of the most competitive economies in the world. That distinction was highlighted earlier this week when it retained its No 1 position in a global competitiveness ranking by IMD Business School in Switzerland.

A stronger domestic economy will help Singapore strengthen its reputation with investors globally, Mr Heng said.

“A trusted and reliable Singapore, relevant to the world, will in turn attract investments into Singapore, and give Singaporeans an edge in seeking opportunities at home or abroad,” he said. “This Singapore premium is precious.”

Updated: June 22, 2020 02:41 AM

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