COVID-19 has resulted in Singapore’s worst recession since independence. After almost two years of living with COVID-19, it is time to move from drawing down on our reserves to survive, to generating jobs and growth in the new normal.
#ChallengeAccepted. This isn’t the first time Singapore’s economy is changing gears.
Before the 1960s, our economy relied heavily on entrepôt trade, and unemployment was in the double digits. To generate more jobs to absorb the increasing number of unemployed workers, between the 1960s to 1970s, we went on a path of labour-intensive and export-oriented industrialisation. It worked – by 1970, Singapore had achieved near full employment.
But with the limited supply of manpower, labour costs started to rise. To keep growing, Singapore had to move into higher-value goods. So in the late-1970s to 1980s, we upgraded our economy by upskilling our workers and transitioning to technology and capital-intensive industries.
Then the 1985 recession showed that Singapore needed to do even more – our neighbours were getting more competitive in mass production manufacturing. So between the 1980s and 1990s, we also diversified our economy by growing the tourism and banking sectors, and expanded our presence overseas.
From the late-1990s onwards, we geared up to become a knowledge-based economy and positioned Singapore as a key node in the regional and global network.
At every stage of our journey from Third World to First, we have moved forward by looking for opportunities in the challenges we faced. Our high unemployment numbers in the 60s became an opportunity to attract manufacturers needing manpower. Our high labour costs in the 80s moved us into high-end industries in speciality sectors. Our vulnerability to global change forces us to stay ahead of trends in high-growth areas, whether in headquarter services, education, biotechnology, renewable energy, pharmaceuticals or digital commerce.
Singapore has never stood still. We have made economic pivots as our circumstances change, each time getting better and smarter. What opportunities lie in our current challenges? We will find them again.
📸: Ministry of Information and the Arts Collection, courtesy of National Archives of Singapore