Singapore does not pursue growth for growth's sake. Instead, economic growth is important to build a better Singapore, while also improving Singaporeans' standard of living, Deputy Prime Minister Heng Swee Keat said in Parliament today (Apr. 21).

Delivering a speech on the fifth day of the debate on the President's Address, Heng also explained the economic challenges Singapore faces in the short and medium term.

Economic growth allows Singapore to better support families

Economic growth is important not simply for its own sake, but it is crucial as it improves Singaporeans' standard of living.

Growth allows the nation to better support families, care for the elderly, and look after those with disadvantages. It also allows Singaporeans access to better jobs, which in turn, allows them to raise their families, Heng said.

In the long term, economic growth coupled with careful management of the national reserves will allow the country to prepare for turbulent times.

The national reserves are important as they helped Singapore weather difficult times.

During the Covid-19 pandemic alone, Singapore was able to draw S$40 billion from past reserves to address the nation's needs and support the livelihoods of many Singaporeans.

Without the reserves, the country and the people might have been gravely affected by the pandemic.

Singapore did not need to borrow money during Covid

"We didn't borrow a single cent" to brace through the pandemic which would have "burdened future generations," Heng said.

He emphasised that this would not be possible without strong growth and discipline to manage the national reserves.

Heng urged caution against suggestions from the Workers' Party such as offering alternatives to the GST hike, which might hinder the rate of accumulating reserves, as it might leave future generations with fewer resources.

"We must do our best to build up the capability and resources for future generations of Singaporeans, just as the previous generations had done for us," he said.

Challenges/structural changes

Heng addressed three structural challenges occurring on a global scale that Singapore faces.

Scientific and technological innovations

Firstly, scientific and technological innovations are rapidly reshaping many sectors of the economy.

Innovations like AI and robots are reshaping many jobs and skills, while new sectors like the digital economy and renewables see many startups and smaller companies moving to the frontiers with great agility, perhaps unsettling more traditional firms and workers.

Despite the concerns innovations brought to the table, Heng reasoned that these advances might be our best bet to address global challenges like climate change and the ageing population, as this development can directly bring us closer to healthy longevity and a net-zero world.

Not only that, but Singapore must deepen investment in research and development and link them back to the industry transformation efforts. Doing so will position Singapore as the Global-Asia centre of technology, innovation and enterprise.

Doing so will not only benefit Singapore, but the region and the world.

Singapore has adapted to such developments

Singapore has strengthened research capabilities in local universities like the National University of Singapore (NUS) and Nanyang Technological Universities (NTU), which are both ranked among the best in the world.

Efforts to develop a lively startup ecosystem by connecting venture capital and private equity with innovative startups and companies have also yielded good results, as Singapore is ranked among the top ten most innovative economies in the world.

Heng said Singapore has to advantage of "the best of science, technology and innovation", and encourage workers to ride on the waves of these advances.

Singapore seeks to be a trusted partner with different parts of the world, to "facilitate collaboration between like-minded partners and countries" and to welcome the best scientists and researchers from around the globe.

Increase in competition among technological supply chains

Thirdly, ageing population remains a challenge for many governments in the developed world.

Ageing affects personal consumption, retirement adequacy, healthcare consumption, and economic dynamism.

Singapore is facing these challenges that have strained many societies confronting similar issues. The country may need to make unpopular policy moves, like raising taxes to address these social needs.

But crucially, Singapore would need to address the crucial issue of talent and immigration.

Remain open and connected, including foreigners who contribute to Singapore

Heng encouraged Singaporeans to remain open and connected to stay relevant and useful.

Openness is not a new concept in Singapore as our multi-racial society reflects this open-mindedness.

This openness has also allowed many Singaporeans to venture outside of Singapore to study or work overseas. At the same time, the same openness must also be applied to welcome foreigners who come to Singapore to contribute to our talent pool.

"It may be uncomfortable experiencing these differences when we encounter newcomers," Heng said. "We may also be concerned about wealth inequality, more severe competition for jobs, or even unfair workplace practices".

But Heng assured the House that the government is committed to addressing and adjusting existing policies to support Singaporeans fully.

"The value of being a Singaporean will rise if we remain dynamic, outward-looking, and effective in building connections with people around the world," Heng asserted.

Developing people

But to fully develop and foster economic growth in the country, Singapore must also be committed to developing its people.