Manufacturing no doubt is an important part of the economy. Back in the 70s, first-mover advantage + hardworking work force + geographical location made Singapore's manufacturing sector the pillar of the economy.
Today, the driving force of manufacturing is simply cost.
Japanese companies, of which Toyota pioneered advance manufacturing standards like six sigma, have also realised that they need to compete on cost. Hence the numerous vehicle recalls over the last few years due to manufacturing defaults.
Singapore can no longer compete on cost with the likes of China, Malaysia, Vietnam and even Thailand taking away alot of our manufacturing output.
Seagate closed its Singapore plant in 2010 and shed 2000 jobs.
Motorola shut a plant producing hand sets and 700 jobs were lost.
ST Microelectronics moved some operations to Shenzhen, Chna.
But one can say that hey, many MNCs still have their HQs in Singapore.
And why not? These corporate mammoths get tax free HQ status, enjoy low corporate taxes and get a free hand at hiring and firing anyone they want- it's an employer's dream!
To fund this corporate largesse, our government introduced the regressive GST system, which taxes the poor more than the rich.
In any case, the major components in our manufacturing are electronics output and biomedicals. The two are extremely volatile and leave our economy haplessly exposed during economic down cycles.
So with five decades of interrupted rule, one would think that our government would have moved our economy with the times, not just to achieve growth but to withstand the inevitable downturns.
Given the circumstances in the region, ramping up the services industry might be the way to go. Hong Kong's economy is over 80% services and one can argue that they may be better placed to weather changes to the region's economic order than Singapore.
SINGAPORE: Trade and Industry Minister Lim Hng Kiang rebutted the economic policies proposed by the Singapore Democratic Party's (SDP) Tan Jee Say, one of which is to shrink the manufacturing sector.
Mr Lim said the manufacturing sector is important because it creates many synergies and linkages for other industries to grow such as financing and wholesale.
Mr Lim was speaking to reporters on the sidelines at the official opening of Clementi Public Library on Saturday.
The manufacturing sector contributes about a quarter to Singapore's economy.
But a proposal by the SDP candidate aims to phase out that sector, in favour of ramping up the services industry which he believes is more sustainable.
Mr Tan, who is a former MTI official and former Principal Private Secretary to Senior Minister Goh Chok Tong, was unveiled by the SDP as one of its candidates on Friday.
He believes this proposal will reduce the dependence on cheap foreign labour and reduce the economic volatility faced during downturns.
However, that has been slammed by the government as unrealistic, as it will not drive the same level of growth as the manufacturing sector.
Mr Lim challenged: "How confident are you that the services sector will take up the slack? Yes, there are some prospects for us to grow the sector as we are doing whether its financial services, port, regional services, education, healthcare, creative services.
"But we don't think that collectively or individually, all these services will take up the slack if we give up manufacturing."
Mr Lim added that it is important to have a diversified economy and not be too overly reliant on a single sector.
Mr Lim is urging voters to study the opposition's proposal carefully because a wrong choice could have detrimental consequences for the economy.
He also took issue with Mr Tan's criticism that the casino and gaming sector was "the wrong kind of services" to go into.
Mr Lim said the sector contributed only a small part of GDP.
Still, he added that the ministry understood the potential social consequences and is monitoring the situation closely.
Mr Lim said: "If SDP wins and gets the support of Singaporeans, then investors will say 'hey, this is the strategy and Singaporeans are supporting such a strategy, now what does that mean to our future investments?' This is something very serious.
"If it's a private individual, if he puts up his ideas as a friend, as an individual, we'll debate it over coffee. But now he is a political candidate standing for elections, Singaporeans have to study his ideas carefully, compare it with what we are doing, make a decision which is better for our future, because it's not just our future; it's not just a GRC that's being affected, it's also sending a very strong signal to potential investors and existing investors."
For the General Election, it will be another party that Mr Lim will likely have to worry about in the battle for West Coast GRC.
The Reform Party is expected to contest there, but his team is confident its track record will give them the edge.
"There is a profound difference between walking the ground, and working with the ground or for the ground, and we are in the latter category for sure, and we have been working systematically and we intend to continue to do that all through," said S Iswaran, Singapore Senior Minister of State for Trade & Industry and Education.
West Coast GRC has had a walkover in the previous two elections.
It will also see two newcomers into the PAP team: former CEO of Energy Market Authority Lawrence Wong, and Standard Chartered's Head of Premier Banking Foo Mee Har. They will join incumbents Arthur Fong, S Iswaran and Lim Hng Kiang.
- CNA/fa/ls
Mr Lim said the manufacturing sector is important because it creates many synergies and linkages for other industries to grow such as financing and wholesale.
Mr Lim was speaking to reporters on the sidelines at the official opening of Clementi Public Library on Saturday.
The manufacturing sector contributes about a quarter to Singapore's economy.
But a proposal by the SDP candidate aims to phase out that sector, in favour of ramping up the services industry which he believes is more sustainable.
Mr Tan, who is a former MTI official and former Principal Private Secretary to Senior Minister Goh Chok Tong, was unveiled by the SDP as one of its candidates on Friday.
He believes this proposal will reduce the dependence on cheap foreign labour and reduce the economic volatility faced during downturns.
However, that has been slammed by the government as unrealistic, as it will not drive the same level of growth as the manufacturing sector.
Mr Lim challenged: "How confident are you that the services sector will take up the slack? Yes, there are some prospects for us to grow the sector as we are doing whether its financial services, port, regional services, education, healthcare, creative services.
"But we don't think that collectively or individually, all these services will take up the slack if we give up manufacturing."
Mr Lim added that it is important to have a diversified economy and not be too overly reliant on a single sector.
Mr Lim is urging voters to study the opposition's proposal carefully because a wrong choice could have detrimental consequences for the economy.
He also took issue with Mr Tan's criticism that the casino and gaming sector was "the wrong kind of services" to go into.
Mr Lim said the sector contributed only a small part of GDP.
Still, he added that the ministry understood the potential social consequences and is monitoring the situation closely.
Mr Lim said: "If SDP wins and gets the support of Singaporeans, then investors will say 'hey, this is the strategy and Singaporeans are supporting such a strategy, now what does that mean to our future investments?' This is something very serious.
"If it's a private individual, if he puts up his ideas as a friend, as an individual, we'll debate it over coffee. But now he is a political candidate standing for elections, Singaporeans have to study his ideas carefully, compare it with what we are doing, make a decision which is better for our future, because it's not just our future; it's not just a GRC that's being affected, it's also sending a very strong signal to potential investors and existing investors."
For the General Election, it will be another party that Mr Lim will likely have to worry about in the battle for West Coast GRC.
The Reform Party is expected to contest there, but his team is confident its track record will give them the edge.
"There is a profound difference between walking the ground, and working with the ground or for the ground, and we are in the latter category for sure, and we have been working systematically and we intend to continue to do that all through," said S Iswaran, Singapore Senior Minister of State for Trade & Industry and Education.
West Coast GRC has had a walkover in the previous two elections.
It will also see two newcomers into the PAP team: former CEO of Energy Market Authority Lawrence Wong, and Standard Chartered's Head of Premier Banking Foo Mee Har. They will join incumbents Arthur Fong, S Iswaran and Lim Hng Kiang.
- CNA/fa/ls
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