SINGAPORE, Dec. 4 (UPI) -- Armed with a convincing mandate, the Singapore government is ready to take a good look at the country's current business model and turn over every stone to "upgrade, transform and revitalize" the economy for the long-term.
As was the response to the mid-1980s recession, the government has announced the setting up of a top-level Economic Review Committee (ERC) which will review all aspects of the economy and make recommendations for structural changes.
"We are going to look at all the stones and we are going to turn them all over. Some we may put back, some we may put some place else," Deputy Prime Minister Lee Hsien Loong told a press conference Monday. "I would not like to pre-judge, but I think at the end if recommendation is to maintain the status quo, then we would have wasted our time."
Lee, who will chair the ERC, said a final report should be produced within nine months, though the ERC will strive to produce a first set of recommendations by April, especially on fiscal policies, ahead of the budget due to be released on May 3.
The 20-member ERC comprises government ministers, trade union leaders as well as representatives of the private sector, like Johan van Splunter, the chairman and chief executive of Philips Electronics Singapore and Rob Stein, the chief executive for Asia-Pacific of Deutsche Bank. The ERC is itself divided in 7 sub-groups assigned to review specific issues in greater details.
The committee will recommend measures to upgrade the manufacturing sector and move into higher value-added, knowledge-intensive activities (research, biomedicine), as strategies to promote service industries where Singapore has a competitive edge, and will also review taxations and the CPF system.
The timing of the announcement comes at the time when the country is facing its worst recession for 37 years, with GDP growth expected to shrink 3 percent this year, and the country has been losing its edge as a low-cost manufacturing center, against other southeast Asian countries and China as wages cost remain high.
Khaw Boon Wan, a senior minister of state and chairman of one of seven subcommittees, anticipates that as a result of the review, the country will be even more export oriented, especially as the export of services is developed.
"I don't think that the result of this (review) is to make ourselves less export dependent. We are in a globalised world and we are a globalised economy ... that is not going to change," Lee added.
He noted that although manufacturing will remain key for the economy, the potential for growth is higher in the services sector.
Though the ERC has the long-term view in mind, Lee anticipates it will also address some of the short-term needs.
"The longer term changes, which we need to make to the fiscal system, will not be incompatible with what we need in short-term to stimulate the economy," he said.
Lee anticipates the implementation of the ERC's recommendations will take a long time. "You can't change policy quickly, but if you want to change mindset to promote entrepreneurship or cause people to be less risk- adverse, those are changes that cannot be cause overnight," he noted.