Sunday, 29 November 2015

Govt shift to left in social policies the right move: ESM Goh Chok Tong

There was urgent need to redistribute wealth sustainably to mitigate income gap: ESM Goh
By Walter Sim, The Straits Times, 27 Nov 2015

The Government's shift to the left in its social policies worried Emeritus Senior Minister Goh Chok Tong initially. He felt, as did some Singaporeans, that it was "becoming too populist (and) giving away too much", he said yesterday.

But he later saw that it was the right move because there was an urgent need to redistribute wealth in a meaningful and sustainable way to help lessen the stress of a widening income gap.

Mr Goh said this at a forum when he was asked whether he shared the worries of some Singaporeans who felt the Government was "pandering to the electorate's whims and fancies, and is no longer the firm, decisive Government it used to be".

Yes, he shared their concern, he told The Straits Times' editor-at- large Han Fook Kwang, who had asked the question and was moderating the dialogue attended by 230 people, including business leaders and Straits Times readers.

It was the first of six dialogues in a series titled Pioneering The Future, with pioneer leaders giving their insights on key policies that shaped Singapore into what it is today. The series is organised by the Economic Development Board (EDB) Society and The Straits Times.

Mr Goh said that from his experience, "what you give, you can never take away from the population".

"(Founding Prime Minister) Lee Kuan Yew's style was to give away bit by bit, because there's no end to what people want," he added.

"If you give all at one time and have nothing else to give, that's when they kick you out. And this time the Government is giving a lot.''

But later, Mr Goh said, he realised the Government had "no choice" but to introduce policies such as compulsory health insurance scheme MediShield Life and the Workfare Income Supplement for lower-wage workers. The reason is that Singapore was increasingly becoming a very divided society owing to a wide disparity in income, he said.

Despite acknowledging the necessity of the shift, he still wonders whether the policies will be sustainable in the long run. The Government has been doing calculations of its expenditure, but given such unpredictable factors as the demands of the people in the future and demographic changes, he said, taxes may have to be raised three or four decades down the road to fund the policies.

Mr Goh was asked about the thinking behind policies on wages and the influx of foreign workers during his time as minister and prime minister, and whether more could have been done to raise the wages of low-income workers.

He said in retrospect that more could have been done. But at that time, the policies were right.

In the 1980s when he was Minister for Trade and Industry, he had introduced a high-wage policy to restructure the economy. The National Wages Council also recommended an across-the-board pay increase each year. But the high-wage policy could have been stopped earlier as Singapore subsequently hit a recession and its competitiveness was affected.

On the foreign-worker inflow, he said that although there was the need to meet demand, the influx was allowed to "carry on for too long". It resulted in such problems as a decline in productivity among Singapore workers, he added.

At the end of the dialogue, Mr Goh was conferred the Distinguished Fellow of the EDB Society Award 2015, given to pioneers and society members who have contributed significantly to Singapore's economic growth. Earlier recipients include the late finance minister Goh Keng Swee and former foreign minister George Yeo.

China and India's rise positive for Singapore: ESM Goh Chok Tong
By Yasmine Yahya, Assistant Business Editor, The Straits Times, 27 Nov 2015

As the two Asian giants, China and India, grow in competitiveness and economic dominance, Singapore will have to zoom in on what it can do better than others, said Emeritus Senior Minister Goh Chok Tong.

This may be a daunting challenge, a question that has occurred to him "again and again, like a broken record", he said at a forum yesterday, but ultimately, he believes the rise of China and India are positive for Singapore.

Mr Goh was speaking at a dialogue at The Arts House, the first in a six-forum series called Pioneering the Future, organised by The EDB Society and The Straits Times.

"I see the rise of China as being very positive," Mr Goh said. "China wants to be an open economy. It emphasises a peaceful rise."

As for India, it has the potential to grow and its Prime Minister Narendra Modi has been active at getting things done and shaking up the bureaucracy, he noted.

These developments mean China and India will eventually become very competitive in every field, but will also open up business opportunities for Singapore firms, he said.

"I think China, for the foreseeable future, will still need Singapore. China will take a long time to build up a certain brand name that we have in Singapore, so the Singapore brand is very important," Mr Goh said.

"So maybe outside China... if we can go together with China, lend them the Singapore brand, ride on China's talent and innovation, we could do something."

Singapore firms can also seize opportunities sure to be created through the China-led "One Belt, One Road" initiative. Largely aimed at developing the region's infrastructure, the initiative can ultimately do much more than that, he noted.

"When I went to China... they were thinking about infrastructure, transportation development. But we pointed out that the belt and the road should be much more than just physical infrastructure, it should be about air connectivity, financial services and cultural exchange."

Singapore also has three government-to-government projects in China - in Suzhou, Tianjin and Chongqing - offering opportunities to Singapore firms that want to venture into these growth markets.

Similarly in India, Singapore is already involved in building whole cities there and more opportunities will arise as the economy reforms. Also, if India opens up its aviation sector, Singapore would be a natural hub for people flying between India and destinations such as Australia, China and Hong Kong, he said.

The launch of the ASEAN Economic Community and a planned integration of financial services in the region also hold much promise.

"It's not just about tapping deposits, wealth management and private banking. We can create a quality regional infrastructure which can serve all countries. The most sophisticated products in financial technology can be created here. We can be the centre and China and India will plug in."

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