Enhancing Singapore’s Competitiveness
Enhancing Singapore’s Competitiveness

Enhancing Singapore’s Competitiveness:
Some Fundamental Rethinking*

Tan Khee Giap
Division of Banking and Finance
Nanyang Business School
Nanyang Technological
Universidad
Singapur
ATANKG@ntu.edu.sg

Chen Kang
Division of Economics
School of Humanity and Social
Ciencias
Nanyang Technological
Universidad
Singapur
akachen@ntu.edu.sg

Abstracto
Singapore’s economy faces some major concerns resulting from
intensified regional competition and the transformation from be-
ing investment-driven to innovation-driven. This paper examines
(1) the accumulation and utilization of huge government surpluses
in the past 40 años; (2) the country’s total cost structure (p.ej.,
land, wages, and regulatory costs); (3) the relationships among
small and medium-sized enterprises, government-linked compa-
nies, and multinational corporations; y (4) the product and mar-
ket diversification that is needed to mitigate the impacts on un-
employment resulting from structural changes and the transition
from manufacturing to services. Singapore’s comparative and
competitive advantages as a strategic hub of economic activities in
Asia are examined and policy recommendations are put forward.

1. Introducción: From growth prosperity to growth
discontinuity

En octubre 2001, the Singapore government announced the
establishment of the Economic Review Committee under
the leadership of Deputy Prime Minister Lee Hsien Loong
“to fundamentally review our development strategy and
formulate a blueprint to restructure the economy, even as
we work and ride out the current recession,” and the gov-
ernment promised that “no stone will be left unturned” in
the reinvention of the “Singapore Inc.” developmental
state model (Sotavento 2001).

* This is a revised version of a paper prepared for the Asian Eco-
nomic Panel meeting jointly convened by the Hong Kong Insti-
tute of Economic and Business Studies, The University of Hong
kong, the Earth Institute at Columbia University, the Global Se-
curity Research Center, Keio University, and the Korean Institute
for International Economic Policy, 12–13 April 2004, Hong Kong,
SAR, Porcelana.

Asian Economic Papers 4:3

© 2006 The Earth Institute at Columbia University and the Massachusetts

Institute of Technology

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Enhancing Singapore’s Competitiveness

In contrast to the economic prosperity in the era of growth from 1987 a 1997, cuando
Singapore experienced sustained high growth in both the manufacturing and ser-
vices industry, the Singapore economy is currently going through a new era of
growth discontinuity with some swings from double-digit growth in one year fol-
lowed by a swift contraction in the next. Por ejemplo, the economy contracted by
0.1 por ciento en 1998 after growing by 8.5 por ciento en 1997; thereafter it expanded ro-
bustly by 6.9 percent and 10.3 por ciento en 1999 y 2000, respectivamente, only to contract
again by 2.2 por ciento en 2001. The economy grew by 2.2 por ciento en 2002 but slipped
back to 1.1 percent growth in 2003 as a result of the outbreak of Severe Acute Respi-
ratory Syndrome (SARS). Although Singapore’s GDP rebounded to 8.8 por ciento en
2004, the economy’s momentum could decelerate if down cycles in the global elec-
tronics set in.

Such growth discontinuity can be explained by several new global, regional, and do-
mestic developments. From a global perspective, studies have shown that global
semiconductor and related electronics cycles have shortened increasingly since 1996,
reºecting the shortening life spans of such products. Since the electronics sector still
constitutes about 40 percent of the republic’s manufacturing activities as of 2004,
manufacturing is therefore likely to experience volatile growth before the full cush-
ioning impact of diversiªcation, such as the move into chemical-related products,
life sciences, and precision engineering, sets in. From a regional perspective, Singa-
pore’s traditional neighboring hinterland, including Malaysia, Indonesia, and Thai-
land, has become much weaker economically and more unpredictable politically
since the 1997 Asian ªnancial turmoil. In terms of competition in export-oriented
manufacturing activities and attracting foreign direct investment (FDI), the unex-
pectedly strong emergence of China as a regional economic powerhouse, coupled
with the sharpened competitive edge and growth strategies of Malaysia, has re-
sulted in the weakening of Singapore’s relative cost competitiveness. In terms of the
domestic economy, Singapore has developed from being a factor-driven, input-cost-
effective economy in the 1960s and 1970s to an investment-driven, highly efªcient
economy in the 1980s and 1990s. As the economy moves into an innovation-driven
phase, the pace of the restructuring process is likely to quicken further in the new
millennium.

1.1 “Before you discuss your future, remember how we got here . . ."
As Singapore moves forward in the international arena, remembering the past, y
how the republic got where it is, is still highly relevant when trying to fundamen-
tally rethink and restrategize. There are at least six basic tenets of the Singapore
economy that we adhere to closely in developing the arguments presented in this
paper:

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Enhancing Singapore’s Competitiveness

1. Singapore will always be more rather than less dependent on external demand,
as its small size limits the scope for domestic demand, unless the population is
doubled to 8 million to achieve a critical-mass effect.

2. As Singapore has no natural endowment, the only resources it can create are

ªnancial and human capital that can grow with wealth accumulation and recruit-
ment of foreign experts.

3. Policy formulations, be they related to taxes, labor, infrastructure, business incen-
tives, or education, will always aim at two economies, a saber, the international
economy and the domestic economy.

4. Housing space, land use, transportation, agua, and electricity supply can be

made available more efªciently, but they will increasingly become more costly
for the citizens, unless subsidized.

5. Since the East Asian ªnancial crisis in 1997, Singapore is deemed to have moved

into an era of economic discontinuity in which future potential growth is likely to
be more volatile compared with the largely uninterrupted and prolonged growth
prosperity over the past four decades.

6. Given the size of the Singapore economy, there will always be a positive role for
el gobierno, ªrst and foremost as a business facilitator or market enabler,
and second as a national moderator of the social well-being of its citizens.

In light of the wide scope implied by the topic of Singapore’s competitiveness and
the space constraints of this paper, we shall concentrate on government surpluses
and total costs structure, which we think have the greatest impact on competitive-
ness. This paper is intended to serve as a useful source of reference, junto con el
1986 Report of the Economic Committee, el 1991 Report on the Strategic Economic Plan,
y el 1998 Report by the Committee on Singapore’s Competitiveness, for future policy-
fabricantes, business practitioners, and academic researchers who are interested in a
small open economy such as Singapore.

Our analysis is organized as follows. Sección 2 reviews the accumulation, manage-
mento, and utilization of massive government surpluses that Singapore has accumu-
lated over the past four decades, y sección 3 addresses Singapore’s total cost
structure in terms of land and related costs, wages and labor costs, and regulatory
and statutory costs. Sección 4 looks into the interrelations among small and me-
dium-sized enterprises (SMEs), government-linked companies (GLCs), and multi-
national corporations (MNCs). Sección 5 explores the efforts to diversify production
and markets and to entrench manufacturing and services clusters. Finalmente, sección 6
rethinks Singapore’s comparative and competitive advantages as a viable hub for
diversiªed economic activities and as an economic leader in global trading.

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Enhancing Singapore’s Competitiveness

2. Reviewing the accumulation, management, and utilization of government
surpluses

2.1 Background and issues at stake
En esta sección, we focus on the economic analysis of the accumulation, manage-
mento, and utilization of government surpluses, which have considerable implica-
tions for Singapore’s longer-term competitiveness.

For a small, resource-scarce, open economy like Singapore, ªnancial resources can
and should act as a substitute for natural endowments such as minerals or oil. Como
ªnancial resources grow with economic success and prosperity, government sur-
pluses are accumulated for a variety of reasons. After economic takeoff, el siguiente
long-term concerns are consolidation, intergenerational distribution, and sustain-
capacidad. National surpluses graduate from being mere capital for current production
to being a reservoir of funds for future investment and capacity building, and as the
assets, seguridad, and wealth of the nation.

Concerns about accumulation, management, and utilization of Singapore’s govern-
ment surpluses have intensiªed since the 1980s. These concerns are essentially a
reºection of an increasingly better educated and hence more demanding population
arising from decades of high income growth. The Monetary Authority of Singapore
(MAS), the Government of Singapore Investment Corporation (GIC), and Temasek
Holdings Private Limited (Temasek), all reporting to the Ministry of Finance, are re-
sponsible for managing Singapore’s government surpluses. Actualmente, acumulado
government surpluses, according to our estimate, amount to about S$800 billion, of which GIC manages about S$200 billion; MAS, which manages shorter-term liquid-
ity under tighter rules, manages probably another S$100 billion; and Temasek man- ages the remaining S$500 billion, through its listed and unlisted equity shares in
GLCs.

Since the Singapore economy entered an era of growth discontinuity following the
Julio 1997 Asian ªnancial crisis, in contrast to the era of continuous growth between
1987 y 1997, its steadily growing government surpluses have become the subject
of intense and open debate. Both members of parliament and the general public
now question and often object to the philosophy of surplus generation by the gov-
gobierno, which has been returned to power in every election since Singapore’s in-
dependence in 1965. The issues of concern naturally revolve around the role of the
government and the principles, justiªcations, and mechanisms of surplus accumula-
ción. Some overriding concerns are that surplus generation should not crowd out
economic growth, suppress employment creation, and exacerbate income disparity.

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Enhancing Singapore’s Competitiveness

Of late, there have been demands for more information and transparency on the
management and performance of ªnancial investments handled by GIC, cual es
designated under the Constitution of Singapore as a “Fifth Schedule” institution—a
wholly government-owned company. With mounting government surpluses, it is in-
evitable that requests from various interest groups will surface from time to time, es-
pecially as the domestic economy becomes more saturated, the external economy
becomes more competitive, and the population ages. Considerations such as when,
cómo, for whom, and for what purposes the surpluses are to be utilized will be vital.
Caution must be exercised so that future utilization of government surpluses will
not bring about welfare dependency or a “handouts syndrome,” or worst of all, dirigir
Singapore down the path to becoming a welfare state.

2.2 Surplus accumulation: Role of the government, principios, justiªcations, y
mechanisms
Singapore has recorded budget surpluses almost every year for more than three de-
cades. The budget surpluses are the outcome of the government’s prudent ªscal
política, which has become a cornerstone of the macroeconomic stability underpin-
ning Singapore’s impressive economic growth. While economists have long advo-
cated sound ªscal policies to sustain long-term growth, few countries display the
level of commitment to long-term goals that has come to characterize Singapore’s
formulation of budgetary policies. Singapore’s experience is generating considerable
interest in the role public sector savings can play in the wealth accumulation of a na-
tion and the circumstances under which such saving is justiªed.

En 1980 the size of the government in Singapore (measured by government expendi-
ture as a percentage of GDP) was slightly below that computed for a country at Sin-
gapore’s level of per capita income (see ªgure 1). But by 1998, public expenditure
fell to a signiªcantly lower level. Cifra 1 also shows the same trend in the share of
tax revenue in GDP. Sin embargo, it is well known that the inºuence of the Singapore
government in economic activity extends beyond the government’s expenditures. A
signiªcant part of the government’s functions is in fact channeled through statutory
boards (SBs). These are semiautonomous agencies that were set up in the 1960s to
handle speciªc concerns, initially in the areas of housing and economic develop-
mento, and subsequently in almost every important economic and social ªeld. In ad-
condición, there are various GLCs, which are incorporated entities that are either wholly
or partly government-owned and are found in a wide range of basically private sec-
tor activities, including manufacturing, shipbuilding and ship repair, trading,
ªnancial services, construction and property development, tourism, and leisure.
GLCs are also active in areas of strategic importance such as military ordnance and
resource supply.

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Enhancing Singapore’s Competitiveness

Figura 1a. Size of government: International comparisons of total government expenditure
para 1980 y 1998

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Nota: AU Australia; CAN Canada; DEN Denmark; FR France; HK Hong Kong; IN India; IND Indonesia; JP

Japón;

KOR South Korea; MAL Malaysia; NL Netherlands; NOR Norway; NZ New Zealand; PHL

Philippines; SING Singa-

pore; SWD Sweden; SWZ Switzerland; THL

Tailandia; TW Taiwan; UK United Kingdom; US United States.

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Enhancing Singapore’s Competitiveness

Figura 1b. Size of government: International comparisons for tax revenue/GDP in 1980 y
1998

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Enhancing Singapore’s Competitiveness

The share of these two sectors (es decir., SBs and GLCs) in Singapore’s economy is large,
although it has been declining with privatization in line with its objective to give the
private sector a greater role in the economy. According to the latest ofªcial statistics,
the share of GLCs in overall value-added is 13 por ciento. The corresponding share of
government and statutory boards is 10 por ciento. Hence the full extent of government
involvement in the Singapore economy is about 23 percent of the gross domestic
product. The ªscal strategy underpinning the formulation of the government’s bud-
getary policies over the decades can be traced through the following budgetary
statement made more than a decade ago, which was reiterated in the FY2004 Budget
Statement (pag. 4):

Objectives of government’s long-term budget policy are three-fold: (1) there must
be an overall balanced budget. Over a ªve-year planning period, recurrent and
development outlays should not exceed the total revenue collection; (2) the share
of national resources taken up by the public sector must be gradually reduced;
(3) the effectiveness and efªciency of public services should be enhanced. As far
as possible, programmes should be self-ªnancing and subsidies kept to the mini-
mum. En general, public services should be provided at least cost to the taxpayer.

The journey toward substantial surplus accumulation started as a modest but laud-
able transition from deªcit ªnancing, under the same government. The government
of the People’s Action Party has wisely regarded accumulated surpluses as ªnancial
resources in lieu of natural resources, as assets and wealth for protection and secu-
rity, and not least, as evidence of political and regime legitimacy. Concerned with
the rectitude and reliability of future governments, the incumbent government has
highlighted the risks involved in failing to protect surpluses of such magnitude.

Sin embargo, there is now greater public scrutiny of the manner in which ªscal sur-
pluses have been garnered from taxation and expenditure policies and channeled to
entrepreneurial GLCs. The same kind of scrutiny has begun to focus on income
maintenance in a recession and on redistribution measures—including the dubious
nature of the New Singapore Shares as political dividends—making surplus utiliza-
tion more complex and wide-ranging.1 In a nutshell, the whole modus operandi of
Singapore’s ªscal processes is under scrutiny.

There are at least eight compelling reasons, reºecting both long-standing and new
concerns, that justify the Singapore government’s continued accumulation of sur-
pluses whenever possible:

1 New Singapore Shares are government surpluses distributed to Singapore citizens as part of

the “fruit sharing” resulting from good economic growth.

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Enhancing Singapore’s Competitiveness

1. Singapore does not possess any natural resource endowment. The signiªcant

pool of ªnancial capital represented by the country’s surpluses allows Singapore
to invest in new growth areas and further diversify the economy in the interest of
increasing its resilience.

2. It will be crucial to continue heavy investment in human resources—in terms

of education and information technology infrastructure in schools and tertiary
institutions—as Singapore transforms itself into a knowledge-based economy.
3. The accumulated surpluses also better prepare the government to deal with the

social challenges of economic restructuring and Singapore’s aging population, en-
cluding structural unemployment and the increasing burden on public health
care facilities.

4. Housing space, commercial land, transportation, and electricity can be made
available to citizens more efªciently, but they will increasingly become more
costly for the citizens unless subsidized. The accumulated surpluses will enable
the government to embark on infrastructure projects without slipping into debt.
5. The shift from Singapore’s long-standing policy of water dependency to its new
strategic aim of self-sufªciency, by way of both desalination and water recycling
methods, will require an extra reserve buffer, the extent of which will be deter-
mined by energy prices and cost of technology.

6. Signiªcant changes in the political environment and the new economic circum-
stances emerging since the 1997 ªnancial crisis can no longer guarantee Singa-
pore decades of economic expansion averaging 8 por ciento, punctuated only by
brief recessions lasting not more than a year. It is quite likely that future potential
growth will be lower and more volatile, while recessions can be long and drawn
afuera, if government policymakers fail to keep the economy more ºexible and nim-
ble.

7. Following the terrorist attacks of 11 Septiembre 2001, global security has wors-

terminado, and so has the vulnerability of Singapore as a city-state. An increase in de-
fense and security spending is expected, at least in the medium term.

8. The Singapore economy has been undergoing structural changes resulting from
decades of intensifying competition from neighboring economies and its tradi-
tional hinterland. De este modo, government surpluses may be needed to buy time, por
containing business costs and speeding up structural changes.

At the root of surplus management, two features remain salient. One is that budget
surpluses that do not crowd out the private sector can remain a core component of
ªnancial accumulation. The other is that accumulated reserves should be utilized
strictly for longer-term protection and for increasing productive capability, capacity,
and sustainability. To ameliorate hardships from recessions, current ªscal sur-
pluses—not reserves—should be tapped.

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Enhancing Singapore’s Competitiveness

While government surpluses are crucial to Singapore’s sustainability as a nation
without natural resource endowments, there are concerns that a surplus-driven
ªscal process could lead to increases in prices of public services or to the creation of
a proªt-oriented mindset in the government, without regard for the larger goal of
providing affordable public services. Such concerns are real, and the basis on which
government agencies are funded therefore becomes crucial.

2.3 Surplus management: Government’s ºow of fund analysis, corporate
governance, y transparencia
One peculiar and off-the-mark area in the budgetary track record of the government
for decades, as pointed out in the 2002 parliamentary budget debate, is the persis-
tent and signiªcant underestimation of the actual budget surpluses. Aunque el
government’s accounts are organized around 10 funds, the budgetary data pre-
sented in government publications include transaction ªgures covering the revenue
and expenditure of only the Consolidated and Development Funds. Interfund trans-
fers such as those to the Sinking Fund, a fund set up for the redemption of loans, son
treated as expenditures, as are transfers to various endowment funds such as
Edusave and Medisave. Hence the ofªcial data tend to overstate expenditures, ser-
cause intrafund transfers and transfers to endowment funds are recorded as expen-
ditures. Budget revenue also tends to be underestimated, because the Ministry of
Trade and Industry has a consistent record of conservative growth projections at the
beginning of each year during the era of continuous growth between 1987 y 1997
and in the more volatile era since 1997.

The prudent nature of government accounting has one simple implication: the Sin-
gapore government has the resources to mount ªscal expansion without adversely
increasing public sector debt. In the medium term at least, the development of a
structural deªcit in Singapore, given the current government’s budgetary philoso-
phy, is a most unlikely prospect.

Government surpluses are national assets belonging to the citizens of Singapore,
with the incumbent government serving as the custodian and the elected president
as additional protector under the current dual-key system. Protection of national as-
sets is not limited to guarding against unconstitutional use and abuse. It also encom-
passes prudent and optimal investment of the assets and protecting them against
mismanagement. Four contentious issues are often highlighted by critics of the gov-
gobierno: efªciency in terms of yields, performance-based accountability, the risk ap-
petite of GLCs in the global marketplace, and the strategic role of the state with re-
gard to surplus management.

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Enhancing Singapore’s Competitiveness

Regarding the role of the state in corporate investments by Temasek (which owns
most of the GLCs), Temasek stated in the FY2002 Budget Statement that it intended
to publish the mission charter soon to clarify the role of the Temasek companies in
the Singapore economy. As for accountability and transparency in regard to surplus
management, Suppiah Dhanabalan, chairman of Temasek, clariªed in June 2002 eso
appointments to executive positions in the GLCs are based on merit. He also reiter-
ated that the corporate investment arm of the government would be more active in
strategizing for the stability of companies in terms of growth direction and business
diversiªcation.

The public is often suspicious that Singapore’s government surpluses may not be
properly managed. To allay these concerns, the government could make available
information about the returns on global bonds and equities in which government
surpluses have been invested, without disclosing details of the exact asset and coun-
try mix. A comparison of the performance of a globally balanced portfolio in Singa-
pore dollars over the period 1986 a 2001 with the yield on a Singapore-dollar-based
three-month certiªcate of deposit vividly demonstrates the superior performance of
a globally balanced approach, whatever combination of global bonds and equities
was put into such a portfolio mix (see ªgure 2). The GIC 2001 yearbook explicitly
spells out the various benchmarking criteria being adopted in various categories of
ªnancial investments. This is a positive step toward satisfying the strong public de-
sire to understand GIC’s genesis, mission, and scope of work and toward generating
a better appreciation of its involvement in fund management and the development
of the ªnancial sector in Singapore.

2.4 Surplus utilization: Cuando, for whom, for what, y cómo
It would appear that government surpluses have been deployed during both
“sunny days” and “rainy days.” During good years, regular refurbishing of public
housing units under a co-payment scheme for asset enhancement (albeit by rotation)
is to give Singaporeans a greater stake in the country. The New Singapore Shares
Scheme is supposed to be an income-based, progressive approach to redistribute
some of the government surpluses generated. The public sector also receives bud-
getary bonuses from productivity gains.

During bad years, the handouts become the “sweets” to go with the “bitter medi-
cine.” The Economic Restructuring Shares Scheme uses an approach based on
type of property owned, with the option of instant cash-out to help Singaporeans
adapt to structural changes, and as a bonus for national servicemen who contribute
to the security of Singapore. Cash handouts are in the form of lump-sum top-ups
of Singaporeans’ Central Provident Fund (CPF) accounts, across-the-board

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Enhancing Singapore’s Competitiveness

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$ S n i n r u t e r f o e t a r , s e i t i u q e l a b o l g d n a s d n o b l a b o l G . 2 e r u g i F 176 Asian Economic Papers Enhancing Singapore’s Competitiveness distributions in the name of sharing the wealth of the nation or helping less fortu- nate Singaporeans to tide over difªcult periods, direct rebates, and subsidies. Accumulation of government surpluses in Singapore has evidently slowed since the 1990s. It has become increasingly difªcult for the government to sell the idea of re- serve accumulation and to resist demand for more handouts. Distributing handouts to those who do not need them is a waste of precious ªnancial resources. A more fo- cused approach to assist targeted social groups or purpose-oriented projects, which generate wider beneªts or spin-offs, may be more effective and cost less. The government’s operating revenue has been on the decline since the middle of the 1990s, from about 23 por ciento a 15 por ciento en 2004, and has begun to trend lower than total government expenditures since 2001. This partly reºects the transition process for putting in place a competitive tax structure and the shift from a reliance on direct taxes to one relying on indirect taxes. Al mismo tiempo, total government expenditure—excluding special transfers—continue to hover around 15–20 percent of GDP. If these trends persist, and if long-term unemployment rises and economic growth moderates, there is indeed a potential structural bias toward deªcit genera- tion in the future. Some economists have pointed out that Singapore’s budgetary accounting is highly conservative and not in line with international norms, in the sense that investment income and land revenue are not included in government revenue streams and de- velopment expenditures are regarded as part of government expenditures. Por eso, the argument goes, if Singapore were to adopt international norms of budgetary ac- counting, there would be a very comfortable ªscal surplus each year. Our rough cal- culations indeed suggest that the government would have racked up substantial surpluses for past decades if it had adhered to international norms in its budgetary accounting. Sin embargo, such arguments can lead to unwarranted public pressure to force the gov- ernment down the road of welfarism and other forms of populism. Net investment income can ºuctuate from year to year, and land revenue will not last forever. But welfare expenditures, once incurred, are recurring and difªcult to retract. Such is the current dilemma of the Hong Kong budgetary position. It would require consider- able public persuasion and political will to roll back institutionalized social spend- ing and health care obligations. The lack of precision in policy statements on surplus accumulation, management, and utilization has led to negative public perceptions on all three counts. People are 177 Asian Economic Papers l D o w n o a d e d f r o m h t t p : / / directo . mi t . / e d u a s e p a r t i c e – pd / l f / / / / / 4 3 1 6 5 1 6 8 2 2 0 4 a s e p 2 0 0 5 4 3 1 6 5 pd . . . . . f por invitado 0 8 septiembre 2 0 2 3 Enhancing Singapore’s Competitiveness in general unwilling to accept further saving or wealth accumulation without a good purpose. Since Singapore’s citizens have not been clearly informed and cannot see when reserves will be deployed, they do not appreciate the need to maintain moderate government budget surpluses over business cycles. Como consecuencia, the government is under intense pressure to provide handouts, because it has accumu- lated a substantial pool of reserves. De hecho, past experiences elsewhere have shown that successive governments have increasingly been unable to withstand such pres- sure without making concessions. The strong national surplus position also helps to explain the public’s general resistance to any increase in taxes and charges for public services. There is a considerable gap between the viewpoints of the government and the public on the issue of surplus accumulation, management, and utilization. It is therefore important for the government to inform, educate, and convince people on this issue and narrow the gap. 2.5 Major policy recommendations l D o w n o a d e d f r o m h t t p : / / directo . mi t . / e d u a s e p a r t i c e – pd / l f / / / / / 4 3 1 6 5 1 6 8 2 2 0 4 a s e p 2 0 0 5 4 3 1 6 5 pd . . . . . f por invitado 0 8 septiembre 2 0 2 3 On surplus accumulation The government should continue to operate at a mod- erate budget surplus during years of economic expansion and create wealth through optimal investment returns based on the existing pool of reserves. The government should not succumb to political pressure or pressure from business interests to run budget deªcits (including those generated via off-budget measures) unless condi- tions warrant doing so. The rationale for further surplus accumulation is justiªable and defensible, provided that the channels of surplus generation do not crowd out private sector activities. On surplus management and redistribution The government should continue to aim for optimal yield and returns, in terms of both ªnancial and direct investments. While it may not be practical for the government to be entirely transparent in regard to the returns on its ªnancial investments, data on the returns of an equivalent port- folio (como una 50/50 global bonds plus equities portfolio, as shown in ªgure 2) should be released to the public on a periodic basis. The government should clearly deªne “extreme conditions” for surplus redistribution under a set of principles and guidelines, which could be determined after extensive public debate and discussion. The proposed triangular strategy The government should use our proposed triangular strategy (summarized in ªgure 3) to rationalize the need for budget sur- pluses, to build up the ºexible wage system, and to contain business costs by freez- ing government fees and charges. Primero, budget surpluses could be used to absorb (wholly or partly, depending on future budgetary constraints) the costs of capital 178 Asian Economic Papers Enhancing Singapore’s Competitiveness Figure 3. The concept of the triangular strategy funding or servicing of government loans for all government agencies (p.ej., the funding for mass rapid transit). Such an approach would ease the pressure on gov- ernment agencies to price according to total costs and encourage them to budget on a cost recovery basis. It is imperative that a ªxed proportion of accumulated budget surpluses be recycled back to government coffers. Segundo, in order to achieve a sustainable economic recovery, Singapore must have a highly competitive economy, including a ºexible wage system for a mobile labor market. The best chance of building a ºexible wage system will come when the economy begins to recover. We propose that for the next 3 años, all wage increases should go into the ºexible component, including both the monthly variable compo- nent and the variable bonuses, leaving the ªxed wage component intact. Singapore should work toward the objective of achieving a 30 percent ºexible–70 percent ªxed wage system. Such a ºexible wage system would give Singapore room to cut wages without cutting the CPF in future economic downturns. Tercero, the government can better argue for and convince the public of the need for building up the ºexible wage system by complementing it with a freeze on all in- creases in government fees and charges at affordable levels, for up to 3 años. Such a policy, as part of the overall effort to contain business costs, would be vital given the weak and uncertain economic recovery ahead. Our proposed triangular strategy would add price—and wage—resiliency to Singapore’s economy through the achievement of sustainable budget surpluses and would provide a more convincing rationale for maintaining these surpluses. 179 Asian Economic Papers l D o w n o a d e d f r o m h t t p : / / directo . mi t . / e d u a s e p a r t i c e – pd / l f / / / / / 4 3 1 6 5 1 6 8 2 2 0 4 a s e p 2 0 0 5 4 3 1 6 5 pd . . . . . f por invitado 0 8 septiembre 2 0 2 3 Enhancing Singapore’s Competitiveness 3. Assessing Singapore’s overall costs structure 3.1 Background and issues at stake Singapore, as a city-state, has been constrained by land scarcity and labor shortages, cual tiene, Sucesivamente, led to high business costs and the erosion of Singapore’s com- peticionidad. While it is important to constantly improve labor productivity and re- orient the economy toward high-value-added industries and services, it is equally important to review and re-examine the existing cost structure and to remove those factors that have artiªcially inºated business costs. We review Singapore’s overall cost structure by classifying it into four main categories, a saber, land and business- related costs, wages and labor costs, regulatory and statutory costs, and transporta- tion costs, and by analyzing and discussing in detail the main issues associated with the existing cost structure in each category. 3.2 Land premium, business-related costs, and policy-induced distortion With about 90 percent of the land in Singapore owned by the government and statu- tory boards, the price of land is essentially a function of land allocation, which in turn is based on inputs from various government agencies. State lands are released through the government land sales program, supplemented recently by a reserve list system. The Urban Redevelopment Authority (URA) land releases are based on projections of economic and population growth, whereas the Jurong Town Corpora- ción (JTC) bases its land allocation mainly on Economic Development Board inputs, which are derived from projections of the type and level of investments that the board should attract, given the year’s desired growth rate and the share of manufac- turing in the economy. The JTC also serves the needs of smaller industrialists through its Open Land Launch Scheme. It is recognized that land-scarce Singapore will necessarily have higher land cost than those countries that are vastly endowed with land. But is the price level of Sin- gapore land artiªcially high, distorted by nonmarket factors? Some cost data ob- tained from industry are presented below to provide a crude comparison. Land premium Singapore land leases comprise an annual land rental and a land lease premium determined at the beginning of the lease. Singapore’s land rental is almost 34 times that of the Philippines, 26 times that of Vietnam, y 19 times that of China. Whereas the cheapest up-front land premium for a 30-year lease at Tuas View in Singapore is S$227/m2, the comparable ªgure for a 60-year lease in Nilai,
Malasia, (near the Kuala Lumpur airport) is approximately S$100/m2, and for a 50- year right of use in Suzhou Industrial Park, Shanghai is approximately S$36/m2.
Además, local governments in China often propose to refund the cost of land

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Enhancing Singapore’s Competitiveness

expended by foreign investors; Por ejemplo, in one case, the land rental price is
3 cents/m2 after 2 years of free rental. Granted that there could be differences in
infrastructure, the rental differentials between Singapore and other Asian countries
remain large.

Share of land in production costs For ªrms producing similar products, land
rental as a proportion of total production costs constitutes a much higher share in
Singapore than in other Asian countries. Como ejemplo, in the oil industry, land
cost makes up 30 percent of total expenditures in Singapore, acerca de 5 por ciento en
Porcelana, and less than 1 percent in Vietnam.

Price indexes An indication of price movements of land is the URA price index
for private property. Between 1990 y 1996, the index for residential property
prices tripled, that for industrial property prices rose 2.5 veces, and for the price of
ofªce space, the index almost doubled. Over the next 3 años, following antispecula-
tion measures in 1996 and the Asian ªnancial crisis of 1997, the indexes fell by 30–40
por ciento. En 2000, the indexes rose again at double-digit rates (that for residential
property by 13 por ciento, that for industrial property by 14 por ciento, and that for ofªce
space by 25 por ciento).

Recent survey ªndings show that Singapore has become comparatively less expen-
sive in terms of ofªce occupancy and living costs. According to the Global Research
and Consulting Survey of Occupancy Costs in 2002 by CB Richard Ellis,2 Singapur
was the 31st-most-expensive ofªce location at the end of December 2001, as against
a 25th rank 6 months earlier. In a study conducted by The Economist’s Intelligence
Unit in 2002, entre 134 major cities in 86 countries, Singapore ranked as the 9th-
most-expensive to live, compared to the 7th position 6 months earlier. The recent re-
cession has brought down costs, but inºationary pressures on asset prices might
strengthen again, and Singapore will need to monitor its competitiveness carefully.
Mesa 1 presents some comparative data on apartment and ofªce rentals in various
countries.

Policy-induced distortions A number of government policies and market imper-
fections caused the escalation of land prices prior to the 1996–98 downturn in the
property market. These include the tender system, land pricing policies, propiedad
tax rebates, government acquisition of land, concessionary grants and rates, y un
lack of readily available data on rents.

2 The ªrm of CB Richard Ellis provides consulting services for property owners and investors,
such as ªnancial analysis, management of commercial properties, and valuation and sales.

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Enhancing Singapore’s Competitiveness

Mesa 1. Singapore’s competitiveness in rental prices, 2000

Office rent: Total occupation cost (m2/year)

Rango

Country

3
6
8
9
11
14
35
37
40
42
45
46
47

Tailandia
Malasia
Indonesia
Philippines
Australia
Porcelana
United States
Taiwán
Singapur
South Korea
Hong Kong
Reino Unido
Japón

Fuente: IMD (2001).

US$ 106 150 168 175 223 275 484 521 559 671 992 1,051 1,478 Monthly rent for three-room apartment in major cities Rank Country 13 17 32 37 38 39 41 42 44 45 46 47 48 Malaysia Thailand Australia Taiwan China Philippines South Korea United States Indonesia Japan Hong Kong Singapore United Kingdom US$

660
720
1,010
1,440
1,460
1,490
1,580
1,675
2,010
2,160
2,330
2,340
2,450

The tender system and reserved price The government sells leasehold land through an
open-tender system for a deªned use, provided that the tendered price is above the
reserved price, which is not known to those who bid for the land. Under the govern-
ment land sales program, government valuers examine the last few tender sale re-
sults and determine a “fair” reserve price for a given property. A minor criticism
sometimes heard is that the government’s reserved price may be based on results
tendered before a market change for the worse and may therefore be unrealistically
alto. Since there is rigidity when prices are falling but free movement when prices
are rising, price escalation results.

In the recently introduced reserve list system, the reserve price is made known in
the tender exercise. This system avoids the administrative costs of an unsuccessful
tender exercise for which no award is made, but because of low bidding, the down-
ward rigidity of prices remains.

Industrial land valuation Land should be recognized as a factor of production that
contributes to the value creation process in business. As Singapore’s largest indus-
trial landowner, the JTC is capable of producing externalities (both positive and neg-
ative) and should strive to avoid pricing policies that are inºexible and unrelated to
market realities. It should take into account both cyclical problems and structural
changes in Singapore’s economy. Land should be priced at a level that is justiªable
in terms of enabling existing competitive businesses to stay on and new businesses
to operate efªciently.

Currently JTC’s lease agreement for industrial land is structured such that rental is
subject to upward revision every year (7.6 percent per year in previous years, re-

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Enhancing Singapore’s Competitiveness

vised downward to 4 percent recently). This lease structure simply assumes that the
lessee’s business will grow at a certain rate each year, and hence it should pay more
as the lease progresses. Desafortunadamente, this assumption no longer holds, given that
Singapore has experienced two downturns within a short period of four years, eso
es, between 1997–98 and 2001. Además, while continuous rental increases may
have served the purpose of squeezing out land-intensive industries from Singapore,
they could also push viable ªrms to relocate if artiªcial increases are not closely
monitored and frequently scrutinized. Recientemente, JTC introduced the Market Adjust-
ment Scheme, under which rentals are adjusted annually subject to a maximum in-
crease of 5.5 percent from the lessee’s prevailing rental rate.

Policymakers may argue that the price of vacant land is not the cause of high prop-
erty prices; that even if land is given free to developers, they will sell the ªnished
buildings at the highest prices they can fetch in the market; and that the culprits in
the inºation of property prices are the owners. Sin embargo, high land prices have in-
deed led to high property prices and rentals, as the small number of suppliers prac-
tice markup pricing, and land management does have a role in preventing the ªnal
sale or rental price from rising unfairly.

Property tax and rebate Vietnam, Porcelana, and the Philippines, unlike Singapore, hacer
not levy a property tax on rentals. To counter the recent economic downturns, el
Singapore government has provided rebates on property taxes in off-budget mea-
sures introduced to ease the cost burden of businesses. Desafortunadamente, not all land-
lords share or pass the beneªts on to tenant ªrms.

Land Acquisition Act The Singapore government has the power, under the Land
Acquisition Act (LAA), to unilaterally acquire land or buildings (shop houses) de
individual owners for redevelopment. Owners are compensated at 1995 prices or
the market rate, whichever is lower, and compensation is inevitably below the re-
placement value. This practice has hurt small landowners. Because some acquired
land has been left undeveloped for years, not only is potential output foregone, pero
former occupants were also displaced unnecessarily.

The government should acquire land only for national security, national develop-
mento, or other purposes that serve the national interest. The powers that the Land
Acquisition Act currently gives the government are too wide, such that the Singa-
pore Land Authority seems to be able to acquire land for whatever purpose it thinks
necessary. The phrase “any public purpose” in the LAA should be redeªned to
mean only national security, national development, or other purposes that serve the
national interest. If a statutory board needs land for its own purpose, it should buy

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the land in the open market at the private treaty price. Private landowners should
not be forced to subsidize statutory boards by being compelled to sell their property
to the boards cheaply, as this will distort the price and the true cost of the land and
lead to waste.

The LAA was useful in the early days of independence, as many parts of Singapore
were swampland, squatter land, or rubber estates. The LAA could be used to pay
moderate compensation to large landowners who gained through sitting on large
pieces of land for many years. When the Master Plan of 1958 was introduced, muchos
of these landowners beneªted from the new zoning practices put into place as a re-
sultado. Bukit Sembawang and Lee Rubber, Por ejemplo, gained from large tracts of
land being zoned residential.

Sin embargo, there is distortion even in this case. Because the LAA deªnes compensa-
tion rather cheaply, it enables authorities to acquire in excess of what is truly re-
quired. The compensation scheme imposes less discipline to use private land spar-
ingly to save owners from the agony of being dispossessed.

Small business owners who happen to own shop houses or properties that stand in
the way of new public projects should not be called upon to make extra sacriªces. Él
would be fairer if such owners, when called upon to give up their properties, eran
paid full market value as compensation, and not a “market value” that has been
statutorily truncated. It is time to redraft the Land Acquisition Act.

Government grants and concessionary rates Government grants to foreign investors
and concessionary rates given to large local companies help to support the demand
for factories and land at high prices and high rentals. With the grants, these foreign
investors can afford to bear higher costs (if not bid up factor prices), unlike local
negocios.

Database on rental values A lack of information for one party in a transaction could
result in a higher price being paid for a good or service. For small businesspersons,
cheap and readily available sources of information on property sale prices are the
Singapore Institute of Surveyors and Valuers sales database and the Registry of Ti-
tles. Alternativamente, they can also use URA price indexes.

Hay, sin embargo, no cheap and readily available sources of information on rental
prices, which are a sizable expense item. Singapore’s tax agency has rental informa-
tion reported by landlords, but because of the conªdentiality of tax information, a
wealth of public data collected at taxpayers’ expense cannot be made available to as-

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Enhancing Singapore’s Competitiveness

sist small businesspersons in bargaining for good rental deals. A scheme that en-
courages easy availability of rental information would help to contain high business
costos.

3.3 Wages and labor costs
In making comparisons between Singapore and other host countries in regard to
FDI, high labor costs often stand out as the key factor that makes Singapore less
competitive. Sin embargo, this does not mean that Singapore should compete on the ba-
sis of labor cost alone, because labor productivity should also be taken into consid-
eration. Además, the focus should not be on cutting labor costs, since the ultimate
goal of economic development is to increase income and improve living standards.

Data provided by Singapore’s Department of Statistics show that the share of remu-
neration in GDP in Singapore has been maintained at a relatively stable level of
alrededor 42 por ciento desde 1993. Although considerably higher than that for Thailand
and the other ASEAN countries, it is the lowest among the four Asian Tigers and
substantially lower than those for the developed countries. This suggests that labor
costs in Singapore are not too high in relative terms. Hay, sin embargo, gobernar-
ment policies that distort Singapore’s labor market such that the cost does not reºect
the true scarcity levels.

Policy-induced distortions in the labor market There are distortions arising from
the labor market structure and government interventions in the labor market. Singa-
pore has two segregated labor markets: one for low-end unskilled labor, en el cual
wage inºation is contained by the abundant supply of cheap labor in the region, y
another for skilled labor and professionals, in which salaries have to be as competi-
tive as those in the international market. While welcoming foreign talent, the gov-
ernment tries to discourage the use of unskilled foreign workers in order to help
less-educated Singaporean workers ªnd jobs. Many policy measures have been
adopted for this purpose, including the following:

1. Varying of the foreign worker levy with the skill level of foreign workers. El

levy also jumps to a higher level when the number of foreign workers for a par-
ticular employer exceeds the speciªed ceiling.

2. A $5,000 bond for each worker in certain categories of work permit holders. 3. Imposition of a foreign- to local-worker ratio (which is often evaded by listing dummy local workers on the payroll). 4. Other policy restrictions, including a nationality restriction for workers in the ho- tel industry. 5. Man-year entitlement in the construction industry. 185 Asian Economic Papers l D o w n o a d e d f r o m h t t p : / / directo . mi t . / e d u a s e p a r t i c e – pd / l f / / / / / 4 3 1 6 5 1 6 8 2 2 0 4 a s e p 2 0 0 5 4 3 1 6 5 pd . . . . . f por invitado 0 8 septiembre 2 0 2 3 Enhancing Singapore’s Competitiveness Table 2. Singapore’s competitiveness in wages, 2000 Manufacturing workers: Hourly compensation (wages benefits) Rank Country 1 2 8 9 19 21 23 26 31 33 40 45 Indonesia China Philippines Malaysia Hong Kong Taiwan Singapore South Korea Australia UK United States Japan Source: IMD, 2001. US$

0.137
0.465
1.777
1.958
5.378
6.243
7.060
8.683
14.258
15.492
19.200
22.038

Services professions:
Annual income
(including bonuses)

Rango

Country

2
4
6
10
13
24
25
28
31
32
40
44
46

Indonesia
Philippines
Porcelana
Tailandia
Malasia
Singapur
Taiwán
Australia
South Korea
Hong Kong
Reino Unido
United States
Japón

US$ 2,700 4,100 5,800 9,000 10,100 15,900 22,400 19,800 26,500 19,800 36,600 35,875 75,800 Management: Annual remuneration (base salary, bonuses, e incentivos) Rank Country 2 6 7 10 11 19 26 31 33 35 41 42 43 China Indonesia Malaysia South Korea Thailand Australia Philippines Taiwan Singapore UK Hong Kong Japan United States US$

50,189
65,492
83,926
101,574
100,900
133,820
156,266
181,938
194,642
203,595
260,776
277,045
440,767

As a result of these policies and regulations, manual laborers are more expensive in
Singapore than in other countries in the region (mesa 2). In many cases, the foreign
worker levy and the other barriers instituted do not serve their intended objective of
providing more jobs for Singapore residents because the latter do not want to take
up the jobs the foreign workers are ªlling, and the government policies result only
in higher costs for employers.

Labor costs and employability Since the Asian ªnancial crisis in 1997, Singapore’s
economy has undergone rapid structural change. Unemployed workers are ªnding
it more difªcult to get a suitable new job, and the pay from the new job, if they ªnd
uno, is usually signiªcantly lower than what they previously made. The problem is
more serious for those above 40 years old and with lower qualiªcations. Recientemente, él
was suggested that in order to improve the employability of Singapore’s older and
less-educated unemployed workers, the employer CPF contribution rate should be
lowered. The government should study this problem and proposed solution care-
fully, because the CPF system is very complex, and the proposed solution would af-
fect savings for retirement, health care, and housing.

3.4 Regulatory and statutory costs

Excessive regulation In many cases, companies face an excessive burden of regu-
lación. One example is those in the building and construction sector, in which dupli-
cation of assessments is required to ensure compliance with regulations. Two exam-
ples illustrate the problems:

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Enhancing Singapore’s Competitiveness

1. The owners of a new restaurant were required by regulators to install new ex-
hausts even though the premises they took over had well-functioning ones.
2. In the implementation of Factories Act provisions on ªre safety measures in a
plant with a steel furnace and hot metal works, regulators initially demanded
that sprinklers be installed even though this was impractical. The process of ob-
taining a waiver proved to be long and tedious.

Excessive costs Regulatory and statutory authorities have been slow in removing
obsolete requirements that have led to excessive costs. There is a tendency to “go by
the book,” not to take risks by making new decisions, and not to undertake addi-
tional work by venturing into new areas. Here are three examples:

1. A valve in a tank farm of an oil company broke down owing to a manufacturing
fault and caused a minor oil spill at a jetty front. Even though the company felt it
was able to handle the cleanup of the oil spill, the regulatory body, the Maritime
and Port Authority of Singapore (MPA), was notiªed, according to regulations.
The MPA in turn contacted a subsidiary of a GLC to assist in removing the oil
spill. A cash payment amounting to S$12,000 was demanded up front. The bill to- taled S$70,000 (even though the company assisted in the cleanup), while the ªne
imposed by the MPA was S$500. A boat ride by a company staff member to in- spect the spill was billed at S$2,500 by the MPA (even though the rental rate for a
cruise boat for eight persons for 8 hours is only S$800). 2. The certiªcation costs of a shed built for shade amounted to S$7,000, which was

equal to the construction cost.

3. A company was charged S$60 per month for 12 years for a ªre hydrant meter that was no longer in use. There is also some evidence to suggest that the principle of cost recovery is some- times taken to extremes. Por ejemplo, the URA charges $1,200 per development
plan, based on cost recovery, but buyers do not know the basis of the costing.

While many functions previously handled by the government have been privatized,
the public is not convinced that this reduction in publicly provided services has
been matched by a reduction in taxes. The concern is that the government might be
pushing the public to pay higher costs for services while still collecting taxes for
such services, without any savings to taxpayers resulting from the privatization.
There could also be double charging for the same services. Por ejemplo, in buying
plans and making searches for information from government agencies, many con-
sumers do not understand why, despite restructuring and streamlining of agencies

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Enhancing Singapore’s Competitiveness

and extensive computerization, the cost of extracting information does not seem to
decrease and in many instances seems to be higher than previously.

An unintended result of administrative disorganization may be at work here,
whereby too many government agencies are collecting fees and charges from pri-
vate ªrms, making the regulatory burden excessive if not prohibitive for the creation
or running of proªtable private businesses. Sin embargo, this situation can be avoided
by having an independent body monitor overall regulatory and statutory costs.

Since the mission of the Accountant General’s Department is to ensure that govern-
ment ministries maximize efªcient use of public resources and that government ser-
vices are priced according to prevailing policies, the accountant general’s duties can
be widened to ensure that government ministries and statutory boards are charging
fees and prices at the cost recovery rates based on the most efªcient use of resources.
By extension, the Public Accounts Committee can inquire into any apparent over-
charging of costs for public services.

3.5 Transportation costs
Anecdotal evidence suggests that higher costs in various components add up to a
very high total transportation cost in Singapore.

Port charges Data show that the Port of Singapore Authority (PSA) earns more
per container than do ship owners. Por ejemplo, freight charges for shipping a con-
tainer from Singapore to Jakarta are only US$55, whereas port charges are US$33.
Even though the local transportation cost of moving a container to or from the port
is as high as $85 (US$46), repacking of transhipment cargo at PSA is still more ex-
pensive than moving the cargo from the port, repacking it, and sending it back to
the port for onward delivery.

Local-transportation-related costs The high local transportation cost can be bro-
ken down into a number of components.

Equipment cost The purchase price for a prime mover in Malaysia is about
S$35,000. Sin embargo, the same prime mover costs S$120,000 in Singapore because of
the certiªcate of entitlement (COE) and additional registration fees (ARFs).

Driver cost The monthly salary for a driver of a prime mover is S$3,000 in Singa- pore, which is twice that in Malaysia (M$2,000–3,000).

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Enhancing Singapore’s Competitiveness

Parking cost Vehicle-parking certiªcates are required for renewal of licenses for
commercial trucks, lorries, and other heavy vehicles. Although these certiªcates are
supposed to provide parking spaces in government lots, companies owning these
vehicles nevertheless have to pay for parking in private lots, because there are
insufªcient government parking lots. Además, the government parking lot system
is not working well, because drivers prefer to park their vehicles near their homes.
Como resultado, the designated lots are not used and illegal parking occurs.

Costs of car ownership and usage Currently, there are many costs associated with car
ownership and usage. These include

1. excise duty, which has recently been reduced from 31 percent of the open market

value to 20 por ciento;

2. the ARF, which again has been reduced recently from 140 percent of OMV to 130

por ciento;

3. COE;
4. road tax;
5. electronic road pricing (ERP);
6. petrol tax or fuel tax;
7. parking fees

All of these fees and charges are supposed to control trafªc congestion, but the role
of each is not clear. The existing system has caused distortions: Por ejemplo, muchos
car owners have found it worthwhile to scrap cars that are only 4 o 5 years old.

The insidious effect of higher transportation costs cascading through various levels
of the distribution system and adding substantially to the costs of intermediate in-
puts for a whole range of businesses should not be underestimated. Virtually all raw
materials and intermediate goods have to be transported over land routes in Singa-
pore. Higher costs of fuel, vehicles, road usage, road taxes, and wages all ripple
through the economy, adding costs at every layer for which transportation is an in-
put.

3.6 Major policy recommendations

Review the outdated Land Acquisition Act The LAA was written at a time of ur-
gent need to provide basic housing to a population that was desperately short of it
and for swift urban and industrial redevelopment. Hoy, with basic housing needs
fundamentally fulªlled and the urgency of housing and redevelopment ªrmly in the

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pasado, the harsh provisions of the LAA should be dispensed with. Speciªcally, es
recommended that

• the deªnition of market value in the LAA be revised to provide for a fairer com-
pensation that is equivalent to open-market value without statutory restrictions;

• it be spelled out clearly that dispossessed owners can obtain compensation for

losses due to forced sale of their stock and loss of business; y

• the law placing the onus of proving that a sales transaction is genuine on the

owner be rescinded (as all relevant information is in government hands and not in
the hands of owners).

Peg industrial land price to an index that better reºects market realities Good
market practices should be adopted in property valuation and rental agreements.
The JTC’s method of increasing rental rates by a ªxed percentage each year makes
little economic sense. Además, the JTC’s formula is not as ºexible downward,
whereas in the private sector, lease agreements (p.ej., 3 (cid:1) 3) allow for downward ad-
justments of price (p.ej., en el (cid:1)3 período). Valuation procedures could also follow
common practices in the private sector by having a representative from each party—
one nominated by the lessor and the other by the lessee—provide a valuation and
adopting the average value of their valuations.

Abolish property tax where it is paid in addition to land rental The JTC, durante
the building agreement period or even when a building is under construction, a menudo
passes on the property tax to the land licensee by contract because Section 2(7) del
Property Tax Act treats every lessee of the JTC and other statutory boards as an
owner for tax purposes. In private market practice, sin embargo, the lessor or landlord
pays the tax on the property being leased. As this practice of the JTC increases costs
for businesses, this section of the law should be reviewed.

Make residential, ofªce, and factory rental information more readily available
Actualmente, information on transacted sale prices is obtainable from public sources,
whereas information on rental prices is difªcult to obtain. Landlords of commercial
and industrial properties should be induced to list all the details of their vacant pre-
mises (asking rental price, ºoor area, and date vacant) to a neutral body or company,
say one formed by the Real Estate Developers’ Association of Singapore, the Insti-
tute of Estate Agents, the Singapore Institute of Surveyors and Valuers, o algunos
other government-linked company. They should also be required to report the new
rental and ºoor area details when their premises are leased. The neutral company
can then sell these rental data cheaply to all small businesspersons to help them bar-
gain and secure the lowest rental from the landlords. To persuade landlords to pro-

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vide this information, the government can insist that only those landlords who dis-
close full rental and vacancy details of their commercial or industrial premises will
qualify for rebates, tax incentives, and other beneªts provided by the government.

Abolish foreign worker quotas and retain the levy scheme to achieve
government targets for the usage of foreign workers in the economy A market
price system is preferred over regulations, as it is economically more efªcient and
eliminates hoarding of foreign workers in some cases while restricting the produc-
tive employment of foreign workers in bona ªde cases of real demand. Sin embargo, a
proper monitoring system should be established to ensure a balance between
achieving policy targets and moderating increases in levies that add to higher busi-
ness costs.

Introduce greater ºexibility in the foreign worker allotment To utilize foreign
workers more efªciently, the government should allow companies to supply part-
time foreign workers or part-time domestic helpers.

Reduce the costs arising from policy duplications, which are not necessarily
effective For instance, the government could allow companies to post bonds only
for a portion of the foreign workers they hire, instead of their entire foreign
workforce.

Widen the powers of the auditor general to audit government administrative
normas, regulations, and statutory costs The auditor general would conduct regu-
lar studies, identifying distortions and excessive regulations; monitor overall costs
imposed by government agencies on businesses; and review cost recovery computa-
tions used by government agencies to ensure that their charges are justiªed and free
of duplications.

Use international comparisons to ensure that supernormal proªts are not being
made by statutory boards and government agencies involved in industrial parks’
development at the expense of the local business community In the 1985–86 re-
cession, studies were conducted to determine which statutory boards were making
exorbitant proªts. This led to the government’s creaming off large proªts by these
boards as income tax. In a similar vein, the government should judge whether each
statutory board is performing its statutory functions of land development efªciently.
Although a statutory board should not incur losses, making large proªts should not
be its objective either. This is because when operating costs are high, it is easy for the
statutory board in a crunch to pass these high costs on to the private sector, de este modo
spreading negative externalities to the economy.

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Encourage more day workers from Malaysia The use of more day workers from
Malaysia would introduce more ºexibility and allow more workers to be available
to Singapore businesses without the attendant concerns about housing and other
costs related to foreign workers.

Devolve regulatory activities and business activities to different entities The
government should relieve regulatory agencies of any involvement in related busi-
ness activities of any kind, either directly or indirectly through subsidiaries and
afªliates.

Abolish charges on public services that are covered by taxes The auditor gen-
eral should compile a list of charges on public services that are covered by taxes.
One clear example in which user charges should be minimal is charges for access to
economic and business data. The collection of such data imposes costs on businesses
and taxpayers, yet they are charged if they seek to use such data. The free ºow of
economic and business information should be seen as a vital ingredient of a well-
functioning market economy.

Simplify the structure of ownership costs of motor vehicles Ownership-related
costs such as ARF should be gradually reduced and eventually removed. The excise
duty and road tax should be abolished. Where the government still seeks to impose
an ownership cost, this should be achieved through the COE system.

Simplify the structure of usage costs for motor vehicles The petrol tax and tax
on industrial diesel for machinery, trucks, forklifts, etc., should be reduced and
eventually removed. This will enable owners of vehicles to have a clear idea of us-
age costs. Recovery of usage-related costs should be achieved through the ERP sys-
tema.

4. Interrelationships among SMEs, GLCs, and MNCs

4.1 The background and issues at stake
The nexus of SMEs, GLCs, and MNCs needs to be reconªgured according to their
separate and distinctive strengths, contributions, and needs within the framework
of the Singapore economy. Despite the clearly stated interest of the government in
fostering SMEs and its considerable efforts in this regard, some problems remain
with a dispersed support system that involves many agencies, a mismatch between
affordable and available ªnance in the private sector, and a weak research develop-
ment environment among SMEs.

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Enhancing Singapore’s Competitiveness

GLCs were created in the 1970s to initiate economic activities in areas which the pri-
vate sector was unable or unwilling to enter. En ese tiempo, there was wide consensus
that GLCs were a beneªcial institution, but the consensus began to fray at the edges
in the 1980s when the GLCs moved into nonstrategic areas, in seemingly unfair
competition with other local businesses. By the end of the 1990s, there was wide-
spread criticism of the government’s role in the economy, especially of the ever-
extending tentacles of GLCs into local business. De este modo, there is a clear need to reori-
ent GLCs and redeªne their mission within the Singapore economy.

Even as the government struggles hard to compete with other countries to attract
more MNCs to Singapore and retain those that are already there, it should also en-
deavor to nurture local companies and encourage them to grow in competence and
actuación. MNCs are expected to continue playing a pivotal role in the Singapore
economía, according to the September 2005 blueprint unveiled by the Economic De-
velopment Board.

4.2 Major policy recommendations for SMEs, GLCs, and MNCs
SMEs: Dedicate a statutory board for local enterprise Right now the de facto
statutory board for SMEs is the Standards, Productivity and Innovation Board
(SPRING Singapore). Sin embargo, its mission statement and its ranking of its priorities
give the impression that SME development is not the main function of SPRING. El
mission statement states that SPRING Singapore aims to raise productivity so as to
enhance Singapore’s competitiveness and economic growth for a better quality of
vida, and its three areas of focus are productivity and innovation, standards and
quality, small and medium-sized enterprises, and the domestic sector.

At a practical level, SPRING had adopted a “ªrst-stop” approach to dealing with
public needs (compared with the “one-stop” approach the government took some
time back). SPRING has also introduced this idea to business associations such as
chambers of commerce and encouraged them to set up their own ªrst-stop centers
to serve their respective members. The ªrst-stop approach, sin embargo, could lead to
the need to make several more stops in order to accomplish a particular task, de este modo
giving the impression that there is an unnecessary dispersal of government services.

It would be useful to examine just how far different government services could be
concentrated in one agency and also how the different agencies’ work could be
made to appear integrated at the user interface level while remaining separate be-
yond that level. One existing example of such coordination is the concept of ap-
proved-in-principle (AIP) agency status, wherein one government agency acts as an
AIP agency for the funding schemes of another agency. Greater interagency

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Enhancing Singapore’s Competitiveness

integration along these lines would ameliorate some of the problems of the SMEs re-
lated to seeking and taking advantage of various government assistance schemes.

If a truly centralized organization could be set up which speciªcally and compre-
hensively dealt with all or most of the issues related to SMEs, it would be a tremen-
dous assistance in itself. Perhaps the statutory board could address the needs of all
local enterprises and be charged with facilitating a company’s transition from an
SME to a large local enterprise to a global champion. The centralized functions for
such a proposed SME organization would include (1) integrating funding schemes
for SMEs, (2) promoting the establishment of an SME credit bureau, (3) improving
manpower quality, (4) building comprehensive information and technology plat-
formas, (5) creating a Web community, y (6) coordinating licensing and regulatory
requirements.

GLCs: Conªne government’s business role to select areas and resist the
temptation to go into areas that the local private sector is capable of
undertaking on its own A 2002 report by the Institute for Policy Studies Forum
for Economic Restructuring (IFER) listed the following areas as proper concerns for
GLCs or statutory boards:

1. areas which involve the provision of public goods (transportation, health care,

education);

2. areas of strategic interest (defense related, seguridad, resource supply);
3. businesses which help to regionalize and internationalize Singapore’s products

and services;

4. businesses which require extraordinary capital outlay and involve large-scale

infrastructure development.

For projects in areas 1 y 2, the government should activate its statutory boards or
agencies instead of utilizing GLCs which, by deªnition as corporations, have to be
proªt-driven, especially if private shareholders are also involved. If necessary, a
corporatized entity (100 percent government-owned) could be used. This would
avoid situations in which basic services are delivered to citizens by an entity with
overzealous proªt motivation and yet ensure that efªciency is maintained. GLCs, en
the other hand, should be directed to focus on projects in areas 3 y 4, cuales son
beyond the capability of most local private enterprises.

Set up an independent GLC Review Committee While the existing problems
with GLCs are being tackled, the government should establish, as a mechanism of
checks and balances, a GLC Review Committee to prevent more GLCs from being

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Enhancing Singapore’s Competitiveness

formed unless these are absolutely necessary. The GLC Review Committee should
be given the following tasks:

1. Screening the setting up of any new GLCs to ensure that the government does
not enter into businesses which the private sector is already in or is capable of
embarking on.

2. Reviewing and monitoring the government’s plan for the divestment of GLCs.
Reports on the results of such review should be published at regular intervals,
perhaps on a yearly basis.

3. Setting the criteria for the appointment of directors to GLC boards and objective

performance criteria for nonexecutive directors.

4. Receiving and deliberating on public feedback or complaints regarding any un-

fair practices purportedly carried out by GLCs.

Accelerate the government’s divestment process As the role of GLCs has in-
deed gone beyond that implied by their original objectives, the government’s own
divestment committee has recommended the following:

1. For listed GLCs, the privatization process should be accelerated to bring down
the government’s stake to as low a level as possible, having factored in the gov-
ernment’s strategic interests, if any. (The process will increase liquidity in the
stock market. The government can also use the opportunity to distribute assets to
Singaporeans.) Although it is recognized that no timetable can be ªxed for these
activities, as market conditions will be a governing factor in divestment deci-
siones, it will still be useful to have an indicative time frame so progress can be
measured against it. The Public Sector Divestment Committee’s 1987 informe
should be reviewed, and those recommendations that are still relevant should be
followed up on.

2. For nonlisted GLCs which are nonstrategic, the companies should be listed as

soon as practicable (if they are qualiªed for public listing), with the government
reducing its stake to as low a level as possible over time. For those not qualiªed
for listing, there should be a plan for the divestment of the government’s stake
through open bidding from the private sector. Nonlisted GLCs which are strate-
gic could remain nonlisted.

MNCs We have the following recommendations in regard to MNCs:

1. Incentives should be provided for MNCs to bring along suitable SMEs as poten-
tial equity partners when expanding their businesses into emerging big markets
such as China and India.

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Enhancing Singapore’s Competitiveness

2. Incentives should be provided for MNCs to include SMEs in their expansion into
emerging industries such as biotechnology and life sciences, as they hold great
potential for growth.

3. Before MNCs can be motivated to play a role in collaborating with and helping

to nurture the growth of SMEs, sin embargo, it is only logical for GLCs to lead by ex-
amplio. One possible way is for GLCs to “co-invest” with MNCs in selected SMEs
on a shared-risk basis.

4. Incentives should be provided for MNCs to nurture the growth of SMEs through
the transfer of technology and best practices, joint research, and process and
product development efforts resulting in co-ownership of intellectual property
rights.

5. Incentives should be provided for MNCs to move up the value chain from manu-
facturing to more R&D investments as well as to establish their global shared ser-
vices centers in Singapore. The services provided by such centers can be very
wide-ranging, from information technology, auditing, and corporate governance
to global treasury functions, purchasing, human resources training, and human
resources management of their global expatriates.

Although SMEs, GLCs, and MNCs have separate and distinctive strengths and con-
tributions within the framework of the Singapore economy, there are also clear ad-
vantages in creating linkages among them to a much greater degree than has been
done so far. Their positive and pro-active interrelationships and the nexus that can
be created among them will be one of the key competitive advantages of Singapore
in times to come.

5. Strategic products, services, and markets diversiªcation drive to better
cope with structural changes

5.1 The background and issues at stake
The overall structural adjustment in the Singapore economy is clearly reºected by
the gradual decline in the share of manufacturing output in nominal GDP, which fell
de 27 percent in 1966–73 to 25 percent in 1987–97, in contrast to the rising share of
the services sector, de 15 percent of GDP to 29 percent over the same period. Sin-
gapore’s Economic Development Board (EDB) has committed itself to maintaining
the share of manufacturing output in GDP at a minimum of 25 percent for decades
to come and to expanding the breadth and depth of the services sectors through the
new millennium.

Can Singapore as a city-state break away from the norm of the developed OECD
countries, which saw their economic activities transferred from manufacturing into

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Enhancing Singapore’s Competitiveness

services as the economies matured? In our opinion, the EDB’s long-standing policy
of developing Singapore’s manufacturing and services clusters may still be valid.
This is because even if ultimately Singapore is expected to lose its position as a man-
ufacturing hub, it may still make sense for the government to attempt to retain it, si
only to “buy time” before the full impact and beneªts of the drive to diversify prod-
ucts and markets diversiªcation set in.

In the context of manufacturing sector restructuring, expansion into new markets
and seeking out new business opportunities outside Singapore through the building
up of the external economy appears to be the next logical move to diversify the
manufacturing sector further and reduce vulnerability. As the economy matures into
a more developed state, Singapore needs an enhanced strategy for manufacturing
activities that goes beyond just hosting MNCs to building up a staple of indigenous
MNCs. Singapore needs to nurture local manufacturing enterprises, which are clus-
tered in transport engineering, contract electronics manufacturing, and precision en-
gineering. Deliberate efforts along such lines would help to mitigate unemploy-
mento, since local enterprises are responsible for about 60 percent of the employment
in Singapore, though less than a third of the value-added GDP. Mientras tanto, the gov-
ernment should continue its efforts to establish in Singapore viable hubs in electron-
circuitos integrados, aviation, transportation, logistics, biomedicals, life sciences, precision engineer-
En g, information technology, petrochemicals, pharmaceutical products, tecnología
patenting, nanotechnology, water technology, offshore ªnancial services, education,
health care, business conventions, professional services, gaming, and tourism.

Sin embargo, Singapore’s ongoing economic restructuring is further complicated and
burdened by a small population that lacks critical-mass effect and an aging demo-
graphic proªle whose ratio of dependency will shoot upward by 2010 unless the
population mass is doubled to an estimated 8 million by 2030 through active skilled
immigration policies. In this context, equally important and sensitive issues such as
the local- to foreign-labor ratio, population racial mix, and social-political friction
have to be carefully attended to.

5.2 Major policy recommendations
The drive for diversiªcation of strategic products, services, and markets needs to be
complemented with other efforts on different fronts so that a comprehensive and
multifaceted strategy can provide support for stakeholders in making the critical
leap into the next rung of the value chain that will allow better control of the proªt
zone within the value chain (see ªgure 4). The multipronged effort should include
creating and/or acquiring global brands; implementing a strategy for retention of
MNCs, with incentives to upgrade them to higher-value-added products and

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Enhancing Singapore’s Competitiveness

Cifra 4. Strategic products, services, and market diversiªcation drive

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services; encouraging new MNCs to relocate to Singapore with services and prod-
ucts to create extended value chain activities; enhancing manufacturing vision with
a new strategy to promote global branding, marketing, and distribution capabilities;
expanding and building core competencies in services sectors according to interna-
tional standards; building capabilities in global marketing and distribution; and de-
veloping an entrepreneurship culture.

Consolidate Singapore as a major ªnancial center in Asia by establishing a
ªnancial sector development agency with MAS as the nucleus that works closely
with other government agencies Singapore possesses many characteristics that
can promote its development as a major ªnancial center, but there are some domes-
tic weaknesses that need to be addressed. These include a weak institutional base
for managing domestic savings, a corporate infrastructure that lacks size and depth,

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Enhancing Singapore’s Competitiveness

and the possible weakening of its intellectual and innovation infrastructure. Como un
ªnancial center, Singapore also faces a number of external challenges. Its critical
mass depends on its hinterland’s continued dynamism. Technological developments
are changing the nature of the ªnancial sector, especially in reducing the geograph-
ical spread of large ªnancial ªrms. The local banking sector in Singapore has gone
through a relatively rapid consolidation, but it still suffers from relatively small
global asset size and footprint, low return on equity compared with major interna-
tional banks, and arguably, a rigid and conservative mindset.

MAS has done much to grow the domestic bond market since 1998 but still faces the
challenges of developing a more liquid secondary market, greater price transpar-
ency, and more sophisticated products. The publicly listed Singapore Exchange
(SGX), as a monopolistic equities and derivative exchange operator, has been sub-
jected to regular review. Costs of operating and trading on SGX have to be competi-
tive or alternative trading systems and markets will emerge as challengers to it,
which might not necessarily be a negative development, provided these systems
and markets can attract more liquidity to Singapore. GIC has led the way in
outsourcing some of its assets to Singapore-based fund managers. Sin embargo, the lo-
cal fund management industry can be further enhanced if the CPF board is able to
issue direct mandates to private sector fund managers. Regional processing centers
for in-house activities and third-party outsourcing services are two key trends in
back-ofªce processing that bear watching.

Develop and promote services sectors to include integrated resorts and a
business convention hub to add economic resiliency in anticipation of the
emerging middle class and potential international demand in leisure and
business services from growing China and India As one of the world’s most in-
ternationally oriented economies, Singapore is right in the center of the most dy-
namic growth region of the 21st century and must seize the occasion and develop
initiatives to reposition itself as the tourism and business convention hub of Asia to
capture a signiªcant piece of this potentially growing pie. A combination of strategic
ubicación, seguridad, cleanliness, efªciency, English language proªciency, telecommunica-
ciones, aviation, and ªnancial infrastructure has rendered Singapore a very competi-
tive and advantageous destination for attracting international visitors. The core
challenge to the policy initiative proposed above lies in Singapore’s ability to attract
world-class integrated resort operators to commit to longer-term investment and de-
velopment in Singapore to provide a catalytic effect for international investors to
participate in other infrastructure developments, such as building international con-
vention centers, quality museums, world-class hotel accommodations, and catering

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Enhancing Singapore’s Competitiveness

negocios. Not only would such a proposed policy initiative, once it took off, diver-
sify the local economy further, but more importantly, it would serve to mitigate the
potential structural unemployment currently developing in Singapore.

Extend the global trading network through extensive bilateral and regional free
trade agreements and intensifying cooperation with regional economies
En el
early 1970s and 1980s, Singapore’s economy was heavily dependent upon entrepôt
trade with and thrived on ªnancing the growth of Singapore’s resource-rich neigh-
boring economies, such as Indonesia, Malasia, y Tailandia. Since the Asian
ªnancial crisis in 1997, these three neighboring economies have been seriously hurt,
and the growth momentum of ASEAN has begun to slow down, which has trimmed
Singapore’s growth prospects. The lack of progress on multilateral trade talks by the
World Trade Organization has prompted Singapore to initiate and conclude various
bilateral free trade agreements (FTAs) with international economies including the
United States, Japón, India, Australia, New Zealand, Chile, México, and South Ko-
rea. Singapore has also initiated bilateral economic cooperation with various prov-
inces in China and actively participated in and supported other proposed regional
FTA talks, such as those regarding the ASEAN-China and ASEAN-Japan FTAs. Ser-
ing a small and highly open economy, Singapore will have no choice but to become
increasingly dependent on external demand by plugging into the globalization pro-
cess in order to stay viable and relevant.

In Singapore, structural unemployment is likely to persist due to (1)

Reduce structural unemployment through the setting up of a job development
agency to look into job redesigning, job skill rematching, job retraining, raising
the ofªcial retirement age, and building up a greater ºexible wage component
to cushion hollowing-out effect resulting from manufacturing migrations and to
minimize the impact of employment transition from manufacturing to services
activities
slower growth and an aging population resulting from falling fertility and mortality
rates in which the depreciation rate of human capital tends to be high; (2) the im-
plicit cost of employing Singaporeans presented by the CPF, which may cause em-
ployers to favor hiring foreigners over local (particularly older) workers; (3) el
mindsets of employers, whose preference is in favor of hiring younger foreign
workers over older locals, and of local employees, who are reluctant to take up low-
paying and low-prestige jobs, (4) the pedagogical framework of the education sys-
tema, which is too rigid, too structured, and requires early specialization and tends to
encourage inºexibility and poor adaptability to fast-changing environments; y (5)
the small population as a result of being a city-state, which makes it difªcult for a
displaced workforce to ªnd jobs in the rural sector and results in the lack of a critical

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Enhancing Singapore’s Competitiveness

mass of educated workers and of the skilled work force necessary to create sufªcient
externalities in the domestic economy.

Institute a government agency to lead by investing in and grooming human
capital, beef up research and development capability, and increase expenditures
to upgrade education institutions in order to attract, develop and retain the
best talented workforce globally A proposed policy initiative of this kind can be
complemented with active immigration measures to attract younger skilled profes-
sionals, científicos, and entrepreneurs so as to reduce Singapore’s high dependency
ratio, which will rise vertically by 2010 given Singapore’s rapidly aging demo-
graphic proªle.

6. Concluding remarks and moving forward

Over the past four decades, sound economic and ªnancial fundamentals, a sound
and conducive regulatory environment for business, a skilled and disciplined
workforce, excellent telecommunications and other infrastructure, high living stan-
dards, and a strategic and secure location have attracted many prominent interna-
tional ªnancial institutions and MNCs to set up operations in Singapore. From its
previous position primarily servicing the regional hinterland, it now has to confront
competitive forces that are global in nature. As the services sectors of neighboring
economies develop, Singapore will ªnd itself potentially crowded out.

An increasingly knowledge-based, innovation-driven economy does provide new
opportunities for Singapore. There must be a fundamental shift from the traditional
physical-manufacturing-oriented mindset to one that can handle the borderless, en-
novative, and mobile nature of high-quality productive activities in global services.
Singapore is fortunate to be situated in a multiresource oasis with a fast-growing,
capital-hungry, talented human resources pool and vast market accessibility within
the Asian region. The crux of the matter lies in seizing the moment and developing
initiatives.

En 1984, Goh Chok Tong, then the First Deputy Prime Minister, set the following tar-
get for Singapore: “to attain the 1984 Swiss per capita GNP by the year 1999.” From
a statistical standpoint, this may be regarded as a mission accomplished. In Singa-
pore’s 1991 Strategic Economic Plan (SEP), the vision set for Singapore was that of
catching up with the ªrst league of developed nations, on a moving target basis, por
the year 2020–2030. The latest vision, set in 1998 by the Committee on Singapore’s
Competitiveness (CSC), was for Singapore to become an advanced and globally

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Enhancing Singapore’s Competitiveness

competitive knowledge economy within the next decade, with manufacturing and
services as its twin engine of growth.

Although it is good to have a long-term vision or target, unpredictable political
events and external economic development can very often render such visions or
targets obsolete or irrelevant. A case in point is the ambitious projection of the 1991
SEP, envisioning for Singapore, among other things, a high growth rate in 2000 de
the Singapore-Johore-Riau Growth Triangle which failed to materialize. The vision
del 1998 CSC to harness manufacturing and services as the twin engines of
growth is now encountering serious challenges. The recently established (2002) Eco-
nomic Review Committee is focused on upgrading, transforming, and revitalizing
the Singapore economy, which is troubled by volatile and possibly unsustainable
high growth rates and facing greater risk of income disparity.

Economic restructuring should be an ongoing process of self-renewal, not just one-
time ad hoc measures taken as a reaction to economic crisis. It is in this light that we
propose a continuous series of periodic economic forums, to be held perhaps once
cada 5 años, even when the economy is functioning smoothly. It is critical that
more effort be made not just to formulate policies, but also to implement them, como
some good policies recommended by past committees have remained unimple-
mented, for whatever reasons. Tracking the record of policy implementation itself is
also vital, as difªcult and unexpected outcomes tend to reveal themselves only dur-
ing the implementation process. It is important to recognize that execution founda-
tion in terms of policy implementation, coordination, and a regular bottom-up re-
view process among government agencies. From our ªndings, it seems that some of
the key recommendations put forth in the 1991 Report on the Strategic Economic Plan
y el 1998 Report by the Committee on Singapore’s Competitiveness on consolidating
and improving Singapore’s manufacturing core capabilities have not been fully or
effectively implemented.

Referencias

International Institute for Management Development (IMD). 2001. The World Competitiveness
Yearbook 2001. Lausanne: IMD.

IPS Forum on Economic Restructuring (IFER). 2002. The Institute of Policy Studies Economic Re-
structuring Forum Report, Julio 2002. Singapur: Time Academic Press.

Sotavento, Hsieng Loong. 2001. Speech on the establishment of the Economic Review Committee,
Octubre, pag. 2.

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