The mission of MTI is to promote high and stable levels of economic growth and employment, so that all Singaporeans have ample opportunities to improve their standard of living. A total budget of $1,632 million has been allocated to MTI in FY2006 to achieve its mission.

In 2005, the Singapore economy grew by 6.4%. Growth was broad-based. Manufacturing output rose sharply and the services industries also did well. Many businesses reported better results and more than 110,800 jobs were created. A record 8.94 million tourists visited Singapore, providing a strong boost to our hotel and retail sectors.

In FY 2006, MTI will continue to ensure that the Singapore economy grows at a steady pace. We will do so by moving forward on our key strategic thrusts of stimulating enterprise development, promoting and developing globally competitive manufacturing and services sectors, as well as expanding Singapore’s economic space.

Key Economic Thrusts

Stimulating Enterprise Development

Small and medium enterprises (SMEs) make up about 99% of all enterprises in Singapore. Building a dynamic and competitive base of local entrepreneurs and businesses is thus critical to Singapore's continued economic growth.

MTI will help to raise the productivity and upgrade the capabilities of SMEs, as well as help local businesses internationalise. We have committed $689 million in FY2006 to do so.

To upgrade the capabilities of SMEs, a multi-agency initiative, the EnterpriseOne portal, will be launched in February. EnterpriseOne is the primary channel that will provide business information and government e-services. The portal is supported by a hotline and three Enterprise Development Centres (EDCs), which offer business advisory services to SMEs.

To enhance industry competitiveness, SPRING and IE will continue to work with industry associations through the $50 million Local Enterprise and Association Development (LEAD) Programme. Since the launch of the LEAD programme in May 2005, proposals from six associations have been approved with a more than $20 million worth of government funding. The textile and garment industry in Singapore, for example, will benefit from industry-upgrading projects, such as the formation of a Productivity and Design Development Centre that will increase revenue by about $400 million over the next three years.

In FY 2006, IE will continue to facilitate market access to overseas opportunities. Besides strengthening our foothold in China and ASEAN, long-term plans have been made to deepen our engagement in emerging markets such as India and the Middle-East.

To increase local enterprises’ access to financing, SPRING and IE will continue to partner financial institutions in increasing financing-related facilities and sources of financing. A total of $646 million (including loans) will be committed to financing schemes. This includes the existing Local Enterprise Finance Scheme (LEFS) and Micro Loan Programme, which have provided more than $400 million worth of loans to about 2,400 companies in FY2005.

Developing Globally Competitive Manufacturing and Services Sectors

A diversified economic base is important to ensure that our economy stays resilient across business cycles and help cushion the impact on jobs due to greater global economic volatility.

In this respect, we will continue to develop our manufacturing and services sector as mutually reinforcing growth engines, to provide good jobs for Singaporeans. We are committed to keep manufacturing at least 20% of GDP and we aim to double manufacturing output and value-add (VA) by 2018. On the services side, EDB hopes to increase the total VA from the EDB-promoted services sectors by 2.5 times by 2018.

To maintain the competitiveness of the manufacturing sector, MTI will continue to strengthen and upgrade our key industry clusters by moving them up the value chain and, at the same time, help to develop new capabilities in emerging technologies. For the services sector, alongside traditional services like trading, logistics, and tourism, new services clusters such as healthcare, creative industries and education will be developed.

In FY 2006, $1,886 million (including loans) will be used for the promotion and upgrading of capabilities for industries under EDAS. This will include promoting new growth sectors such as the interactive Digital Media and the Environmental and the Water Technology industries.

Despite intensifying competition from regional markets, Singapore continues to draw in high quality, high value-added investments. In 2006, EDB targets to attract $8 to $8.5 billion of fixed asset investments in the manufacturing sector and $2.5 to $2.7 billion of total business spending in traded services. These would create between 20,000 to 25,000 jobs for Singaporeans, of which more than 70% would be skilled/professional jobs. To help achieve its targets, EDB will be provided with an operating budget of $107 million.

Refreshing our Tourism Offerings

Riding on the momentum of increasing tourism receipts and visitors, STB’s targets for 2006 are S$12 billion in tourism receipts and 9.4 million visitor arrivals.

Under the Tourism 2015 vision launched in FY2005, STB aims to triple tourism receipts to S$30 billion and double visitor arrivals to 17 million by 2015. A S$2 billion Tourism Development Fund was set up to to support strategic tourism projects and various initiatives under Tourism 2015.

To achieve our Tourism 2015 targets, we are transforming Singapore into a vibrant and exciting destination. In April 2005, the Government gave the go-ahead to develop two Integrated Resorts (IRs) at Marina Bay and Sentosa. The Request for Proposals (RFP) for the IR at Marina Bay was launched in November 2005 and will close on 29 March 2006. The RFP for Sentosa will be launched by the first quarter of 2006. New entertainment nighspots like Crazy Horse Paris and the Ministry of Sound at Clarke Quay were also opened. We are at the same time re-making Orchard Road into one of the world’s greatest shopping streets.

In FY 2006, $72 million will be allocated for the Tourism Development Fund to enhance existing tourism precincts and develop new tourism attractions and products.

We will leverage on our strengths as a trusted business hub to anchor more MICE (Meetings, Incentives, Conventions, Exhibitions) events in Singapore, such as the 2006 Annual Meetings of the Boards of Governors of the International Monetary Fund and the World Bank Group in September this year. We will also attract a range of compelling tourism products and lifestyle/entertainment events to enhance our competitive advantage as a destination of choice for business and leisure visitors. For example, 24-hour integrated entertainment outlets will be opening soon at St James Power Station and The Cannery at Clarke Quay. These developments will greatly enhance the variety of entertainment offerings for our visitors.

In addition, tourism players will be encouraged to upgrade their operations and capability through the development of training programmes and service quality standards.

Sustaining innovation-driven growth

The next phase of our economic development would rely heavily on advancements in science and technology. As such, the Government will be making significant investments in growing R&D in the next 5 years.

The recently launched Science & Technology 2010 details the Government’s strategy to sustain innovation-driven growth of the economy in the next five years. It focuses on strengthening R&D capabilities in niche areas, developing research talent, promoting private sector R&D and providing research infrastructure.

MTI will play a significant part in the Government’s strategy to grow our R&D capabilities. A total of $681 million has been allocated to MTI to strengthen Singapore’s R&D capabilities. This includes $557 million for public sector research and research manpower development in the areas of science, engineering and biomedical sciences, as well as $124 million for the Research Incentive Scheme for Companies (RISC) to promote private sector R&D investments in Singapore. RISC provides project-based grants to companies to support the building of R&D capabilities.

Developing Infrastructure

A total of $72 million is set aside for developing industrial infrastructure. This includes basic infrastructure works at one-north, a 200 ha area around Buona Vista that JTC is developing into an integrated work-live-play-learn environment for the biomedical science, info-comm techology and media industries.

Another $813 million is set aside for land-related expenditure. A cutting-edge project which will be undertaken is the construction of underground hydrocarbon storage caverns at Jurong Island. An underground hydrocarbon storage caverns would enhance the safety of storing hydrocarbon and would add to our existing storage capacity. This would consolidate Singapore's position as an oil trading hub, and further support the petrochemical manufacturing and logistics activities here. The underground storage caverns provide the added advantage of conserving precious land above ground, which will enable Jurong Island to be better utilised to accommodate higher-value manufacturing plants.