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Keynote speech at 8th St. Gallen Singapore Symposium – “Confronting Scarcity”

Dr Tan See Leng, Minister for Manpower, Shaw Foundation Alumni House

Foreign manpower

Mr James Soh,

Chair, 8th St. Gallen Symposium Singapore Forum

 

Ms Sophia Gampp,

Head of International Students’ Committee, St Gallen Symposium

 

Your Excellency, Frank Grutter,

Ambassador of Switzerland to Singapore

 

Mr Alexander Melcher,

Special Advisor, St. Gallen Foundation for International Studies

 

Fellow Panellists

 

Ladies and Gentlemen

 

 

  1. A very good evening to all of you, and a real pleasure, very privileged to be here among you to share with you some thoughts and also to listen to your insights in our discussion later.
  2. This year’s theme is “Confronting Scarcity”.
  3. To everyone in this room, scarcity is not new. It confronts all of us, it confronts all countries and cuts across generations.
  4. It is the central problem of economics – how to bridge the gap of ever-increasing demands, wants and in the midst of a limited supply of resources.
  5. There are two approaches to resolving this:
    1. You can take from those with a larger pie and redistribute to those with smaller pies; or
    2. We can all work collectively to grow the pie, so that everyone can have a larger slice.
  6. In Singapore, our focus has always been on growing the pie. That is how we have built our sense of shared purpose and progress.
  7. However, growing the pie has become increasingly more challenging.
  8. First, we face resource constraints on multiple fronts:
    1. Intensifying global competition for capital and talent;
    2. Carbon constraints arising from Singapore’s commitment to achieve net-zero emissions by 2050;
    3. Fiscal constraints arising from an anticipated increase in social needs, social spending and changes amidst the global taxation regime; and
    4. Limited land as well as infrastructure.
  9. Second, these resource constraints are exacerbated by geopolitical tensions that we have today, which have permeated not just to politics, but also trade, technology and security.
    1. Global supply chains are increasingly being put under pressure of disruptions, limiting many countries’ ability not just to meet, but to access and address the demand for resources.
    2. These pressures are felt even more keenly in smaller countries and economies like Singapore, that rely on trade to fulfil our resource needs.
  10. To confront scarcity, Singapore is always looking to:
    1. Innovate and find new drivers of economic growth;
    2. Make better use and optimise existing resources for productivity and value-added growth; and
    3. How we can more seamlessly and painlessly integrate into the global economy.
  11. We also need to build our resilience by diversifying supply chains and promoting high-end advanced manufacturing and local production, in order to achieve a high measure of self-sufficiency. This is especially more critical in the essential and critical industries.
  12. Please allow me to share my experiences at both the Ministry of Manpower and as Second Minister in the Ministry of Trade and Industry today, on how Singapore tackles manpower scarcity and energy scarcity. So you have manpower and power. And how we confront scarcity through integration into the global economy.
  13. Let me start with manpower.
    1. Singapore has no natural resources of any kind.
    2. People are our single, greatest and only resource.
  14. But like many other developed countries, we face an ageing population and we face a shrinking local workforce.
  15. We will continue to be open and need foreigners to come in and augment our local workforce. We must therefore as a country remain an open country, not just to survive but to thrive.
    1. But we have limited land and infrastructure.
    2. There will be limits as to how many foreigners we can take into Singapore before our own fellow Singaporeans feel less at home.
  16. In the next decade, it will become even harder for us to sustain economic growth based on workforce growth alone. Therefore, it is no math for us to know that we are all rapidly aging. Our total fertility rates have fallen below replacement level. Therefore, the only sustainable approach is to pursue high-value, technology driven and productivity-led growth.
  17. To optimise our manpower resources to support such growth, we must focus on raising the quality of our workers and improving their allocation, the distribution to more productive areas of the economy. We do this through both our local and foreign workforce strategies.
  18. First, on the local workforce.
    1. Very fortunately built up by many of our founding generations of leaders that have come before us, we have today a highly skilled local workforce, and the training starts from school. We have a world class school system - Singapore has performed consistently well on the Programme for International Student Assessment or PISA over the years - which prepares locals well for the workforce. Among graduates looking for jobs, nine in 10 are employed within six months of graduation each year.
    2. Beyond formal education, we provide opportunities for upskilling and reskilling our local workforce, particularly to take on jobs in growth sectors.
    3. We fully recognise and have taken on board the accelerating pace of change and also that of disruptions. Hence, we have to keep training our workforce to stay not just abreast, but hopefully ahead of transformations. We are now also in the new uncharted territory of generative AI, and this has grown exponentially in just the past one to two years alone. In fact, last week I was in Davos. AI, generative AI and ChatGPT dominated almost every discussion that I participated in. That is how all of them have not just lamented, they have opined on how it has become the dominant topic at Davos at the World Economic Forum.
    4. Our local workforce should be prepared for such new change, transformation, and to be able to harness such opportunities. Currently, Workforce Singapore and SkillsFuture Singapore offer employment facilitation and training programmes to our local workers.
    5. Our focus for the next bound will be helping our locals move into the more productive growth areas of the economy, for instance like sustainability and digitalisation, which also tend to have better paying jobs.
    6. We are looking to empower our locals to improve their career health, by encouraging them to do long-term career planning, take on jobs with deeper skillsets, so that they can stay ahead of economic and technological disruptions.
    7. One way that we support them is through digital tools. For instance, the recently launched CareersFinder beta feature on MyCareersFuture portal, a Government job search platform, uses data analytics and artificial intelligence to help them enroll in the right courses or take on “stretch” job roles to acquire skills and achieve their career goals.

    8. Beyond helping local workers stay ahead of the technological curve, we also want to encourage companies, our businesses to invest in local leaders. Therefore, we have organised and constructed programmes like the Singapore Global Executive Programme which supports high-growth local companies in building strong local leadership through overseas attachments, overseas opportunities, through rotations and stretch assignments.

  19. Second, on the foreign workforce, and how they complement us.
    1. All of our foreign workforce policies are designed to help us attract and anchor the right profile of foreign workers, who can help us grow new pillars of our economy, drive business transformation, and ultimately create a good ecosystem, and create good jobs for Singaporeans.
    2. Talent is a scarce resource, and great companies will follow talent. By strengthening Singapore’s position as a global talent hub, we attract productive companies, successful companies from all over the world in growth sectors to anchor themselves here, and they in turn create more good jobs for our locals.
    3. That is precisely why we maintain an open stance towards top talent and we have a suite of work passes targeted at this profile of foreign workers. Early last year, in January 2023, we rolled out a new pass, the Overseas Networks & Expertise Pass, aimed at top talent across all industries who earn a fixed monthly salary of at least $30,000. Many companies have quipped that this is the ONE Pass you will ever need.
    4. At the same time, to maintain public support for an open economy, we need to ensure that Singaporeans are able to benefit from this growth. In September 2023, we rolled-out the Complementary Assessment Framework (COMPASS), a new transparent points-based holistic assessment framework for Employment Pass holders. It’s predictability and transparency allows companies to hire highly skilled foreign professionals with skills and networks in shortage in the economy, while also considering firm-level attributes like diversity and support for local employment.
    5. We are also making a decisive shift away from reliance on cheap labour, to a more sustainable model over the long run, where we have a leaner but more productive migrant workforce.
    6. Quotas and levies work hand in hand at the Work Pass and S-Pass types, to manage overall numbers. It helps us to allocate and direct workers to firms that are more productive. Over the years, we have tightened them to spur industry transformation and also nudge job re-design. We will continue to do more to encourage companies towards hiring and retaining better-skilled workers.
  20. Our economy is built on the backs of our workforce. Across the local and foreign workforce, our strategy is to maximise the potential of every individual and allocating manpower resources to the most productive firms, so as to enlarge the pie for everyone.
  21. Besides manpower scarcity, energy scarcity is another key challenge.
    1. Today, Singapore relies on imported natural gas to produce 95% of our electricity needs.
    2. With a well-established infrastructure and global supply networks, natural gas grants us energy resilience and security to support not just households but more importantly at the same time, industries.
    3. However, the global energy crisis has shown that even such strong networks can be disrupted.
  22. Furthermore, we have committed to achieving net-zero by 2050, because climate change is an existential issue for Singapore and for the world.
    1. Here, we face scarcity in another form. Singapore is alternative, renewable, clean energy disadvantaged, and significantly disadvantaged.
    2. Why? Because all of you who have been here, you know our land size. We don’t have enough land size and we don’t have enough land area to put in all the solar panels as needed. Even if we cover every square inch of our land, you will not be enough to supply or generate enough electricity for our needs. We don’t have big rivers for hydroelectric power. If any of you want to try skiing, we don’t have big enough waves for you to so. We don’t have winds to generate wind power.
    3. Yet, we must decarbonise our energy supply. The generation of our electricity actually accounts for 40% of Singapore’s emissions.
  23. How will we as a country tackle energy scarcity, while keeping to our net-zero commitments, keeping our costs in check, and keeping the lights and air-conditioning on? Our strategy must be to expand possibilities through innovation, diversification and cooperation.
  24. First, we will diversify our energy sources by exploring emerging low-carbon energy alternatives.
    1. Hydrogen has the potential to be a key decarbonisation pathway and fuel for power generation.
    2. In 2022, Singapore announced the National Hydrogen Strategy. We are building up domestic capabilities, starting with smaller-scale pathfinder projects.
    3. One such pathfinder project will pave the way for us to be a world leading country in testing and deploying the direct use of ammonia as a low-carbon fuel for energy generation.
    4. In addition, we launched a study in September 2023 to assess the potential of another indigenous energy option. How many of you have been to Sembawang’s hot spring? We are now exploring Singapore’s deep geothermal resource, for power generation.
  25. Second, we will continue to invest in innovative, low carbon solutions.
    1. The International Energy Agency’s net-zero scenario estimates that over one-third of emissions reductions that needs to occur by 2050 are dependent on technology still in development.
    2. Singapore has set aside over S$180 million under the Low Carbon Energy Research fund to support R&D into technologies such as Carbon Capture, Utilisation and Storage, as well as low-carbon hydrogen.
    3. These investments could go a long way in unlocking technological bottlenecks and improve the techno-economic viability of such technologies.
  26. Third, we will continue to establish networks and partnerships. We will work with our international partners on win-win set of initiatives.
    1. The Lao PDR-Thailand-Malaysia-Singapore Power Integration Project. This commenced in June 2022. This allows us to draw renewable energy from as far Lao, through Thailand to Malaysia, and into Singapore, renewable energy generated from solar and hydroelectric power. We have shown that it is feasible, and also mutually beneficial.
    2. Beyond this project, Singapore is also working on several large-scale cross-border electricity trading projects with our neighbouring countries like Indonesia.
    3. As more of these interconnections form across ASEAN, we hope that these will be the building blocks for our larger ASEAN Power Grid.
    4. By working collectively as a community, we can accelerate renewable energy deployment timelines and unlock a greater supply of low-carbon energy for the entire region.
  27. Engaging in cross-border electricity trade is just one example of how Singapore seeks regional and global integration to overcome our resource constraints. As a small country, we must remain connected to the world. Singapore is a firm supporter of a rules-based multilateral trading system.
    1. At three times our GDP, trade is integral to the survival and our success as an independent economy. We currently have a network of 28 FTAs, which are complemented by other economic partnerships and agreements. Our network of FTAs covers at least 60% of the world’s GDP.
  28. We will continue to strengthen our economic competitiveness through such agreements. We are pioneering partnerships for agreements in emerging areas, such as Green Economy Agreements and Digital Economy Agreements. Collectively, Singapore continues to seek out new growth opportunities - “new cheese or bigger pie”, in sustainability, climate change and digitalisation.
  29. We will continue to build trust and forge collaborations with other Governments to achieve: (a) smooth and open flow of trade, (b) expansion, diversification and strengthening of connectivity links, and (c) develop new systems and capabilities to better deal with unexpected supply chain disruptions.
  30. In conclusion, the constraints that Singapore faces - with resources in general, and manpower and energy scarcity points to the need to grow the pie through innovation, productivity-led growth, and connectedness to the global economy.
  31. We have to embrace and adopt this mindset instead of being insular and protectionist, and move from the fear of confronting scarcity, towards understanding, accepting, and even embracing scarcity. And with that, open ourselves, and connect with the world.
  32. It is the responsibility of every generation of Singaporeans, and especially the current generation, to do our best to seek out and boldly carve out new paths for the generations that will come after us.
  33. We are custodians of a very good system established by our founding leaders and it behooves us to build on it and enhance it. To build on a tagline from a famous Swiss watchmaker. We will not just “look after it for the next generation”, but we will do our best to make it better for the next generation and for the many generations to come after us.
  34. Thank you very much.