Table of Contents
Ministry of Trade and Industry (MTI)
The mission of the Ministry of Trade and Industry is to promote economic growth and create jobs. A total budget of $3,360.27 million (excluding Other Development Fund Outlays) has been allocated to Ministry of Trade and Industry in FY2010 to achieve this mission.
MTI aims to achieve the following outcomes:
- A Competitive Economy
- A Globalised Economy
- An Entrepreneurial Economy
- A Diversified Economy
A Competitive Economy
In FY2010, MTI will position Singapore to take advantage of the new growth opportunities of the next decade, while deepening our existing strengths in key sector. We support the Economic Strategies Committee's goal of making skills, innovation and productivity the basis for sustaining Singapore's economic growth in the future. We will make a sustained push to raise productivity growth at all levels. We will encourage enterprise innovation and investments in technology and training. We will also continue to invest in raising the capabilities of our companies and our workforce to secure future growth. We will also take steps to enhance land productivity, and to become a Smart Energy Economy.
To achieve this outcome, we will undertake the following initiatives and programmes:
Ensure adequate and competitive industrial infrastructure
MTI will ensure that Singapore remains a globally-competitive location for investments and businesses, and that adequate resources and infrastructure are available to sustain the growth of our industries.
A total of $366.54 million is set aside for developing industrial infrastructure in FY2010. This budget includes infrastructure works for One-North, a 200-ha work-live-play-learn ecosystem around Buona Vista, for the biomedical science, info-comm technology and interactive digital media industries. Key infrastructural, construction and sub-sea geotechnical works for the Jurong Rock Cavern will continue into FY2010. When completed in 2014, the underground caverns would have a potential storage capacity of about 1.5 million cubic metres for storing liquid hydrocarbons like crude oil, condensates and diesel oil, saving precious land for other activities. The supporting infrastructure at Seletar Airport will continue to be upgraded, to anchor Singapore as an aerospace Maintenance, Repair and Overhaul (MRO) hub. This budget also includes feasibility studies to advance industrial land-intensification, as well as to identify further opportunities to develop industrial activities underground.
Another $2.82 billion is set aside for land-related expenditure. This includes the reclamation and development of land in areas like Jurong Island and Tuas View Extension, as well as the excavation costs for creating the underground caverns. These projects will create new industrial land and space to support the long-term growth of Singapore’s economic activities.
Build capabilities for Productivity-Driven Growth
Productivity is key to Singapore’s long-term competitiveness, the creation of good jobs and improvements in standards of living for our people over time. We need to bring about productivity improvements on a systemic level, to achieve growth on the basis of greater efficiency, effectiveness and innovation. To support companies in their productivity drive, we will work with companies to diagnose key productivity gaps, and take an integrated approach in building up their capabilities to address these gaps. At the same time, we will build up the knowledge base to support companies in the design of productivity solutions in the context of their industry, by setting up a network of sector-focused competency centres. The network of competency centres will facilitate industry benchmarking, and conduct applied research, which they will then work directly with industry, to develop practical tools and techniques which they can apply in their operations.
Build R&D capabilities
The competitiveness of our industry clusters needs to be supported by a strong intellectual and knowledge capital base. A total of $7.5 billion has been allocated to MTI for FY2006-2010 to strengthen Singapore’s R&D capabilities. Of this, $5.4 billion are allocated for public sector research and research manpower development in the areas of science, engineering and biomedical sciences (BMS). The remaining $2.1 billion are 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.
Gross Expenditure on R&D (GERD) has increased from 2.52% of GDP in 2007, to 2.77% of GDP in 2008, with the private sector making up 71.8% of GERD in 2008. The number of Research Scientist and Engineers per 10,000 labour force for 2008 was 87.6.
The development budget for A*STAR programme in FY2010 is $1.24 billion. For BMS R&D, A*STAR will work closely with the Ministry of Health and the National Medical Research Council to integrate basic, translational and clinical research. A*STAR’s Science and Engineering Research Council’s (SERC) Research Institutes (RI) were involved in 222 projects with 146 companies in FY2009 (from beginning of FY2009 up to end November 2009). In FY2010, A*STAR will continue to intensify industry development efforts to catalyse greater commercialisation of technologies, leveraging on the SERC RIs’ multi-disciplinary capabilities.
Ensure competitive, resilient and innovative energy - A Smart Energy Economy
A competitive energy market will continue to underpin our economy, in support of economic growth. In parallel, we will seek to ensure secure and resilient energy supply through diversification of our fuel mix as well as investments in new energy technologies.
Promoting a competitive electricity market. There were two key developments, spearheaded by the Energy Market Authority (“EMA”), that have led to greater competition in the electricity market.
EMA revised the electricity tariff formula in 3Q 2009 to use the average fuel oil prices in the preceding 3 month period, instead of the previous practice of using a one-month period, to set the tariffs. The revised formula allows tariffs to be more reflective of the prevailing market price of fuel. It also helps to smoothen out any large swings in fuel oil prices, which in turn reduces tariff fluctuations.
To ensure more competitive electricity pricing, EMA has commenced tendering out a portion of electricity demand to generation companies (“gencos”) to bid on a competitive basis. Households will benefit as a portion of household electricity tariffs will comprise this tender price which is competitively determined.
Ensuring secure energy supply. To create greater diversity in our energy sources, we are pursuing liquefied natural gas (LNG) importation by 2013. The LNG terminal will enhance Singapore’s energy security by enabling us to import natural gas from different sources around the world. It is also a step in the right direction for fuel-source diversification. The Government announced in Jun 2009 that it will take over the development and ownership of the LNG terminal from PowerGas. EMA subsequently set up a new subsidiary, the Singapore LNG Corporation (SLNG Corp), to own the terminal and oversee its development.
In Apr 2008, EMA appointed BG Asia Pacific (BG) to be the LNG aggregator1 to procure LNG for Singapore. In Jun 2009, EMA and BG finalized the Aggregator Agreement which sets up, among other things, LNG pricing terms.
The Government will also be exploring alternative fuel-types for electricity generation. We will continue to support the use of solar power through incentive schemes such as the Solar Capabilities Scheme (SCS) and Clean Energy Research & Test-bedding Programme (CERT). Businesses and Government agencies that are keen to testbed solar and other clean energy technologies can draw on these schemes.
Developing a dynamic and innovative energy sector. The long-term objective is to continue to promote greater competition in the electricity market. Today, large businesses (also know as ‘contestable consumers’) have a choice of buying electricity from several retailers which offer various packages and value added services. EMA is working towards implementing full retail contestability where households and small businesses will then be able to choose which retailer to purchase electricity.
To test the feasibility of electricity retail competition for households using smart meters, EMA had undertaken an Electricity Vending System (EVS) trial involving 440 residential volunteers in Marine Parade and West Coast. The trial, which was completed in Nov 2009, was a proof-of-concept and successfully tested the use of smart metering technology for deployment to household use. Households were better equipped to monitor and adjust their consumption patterns as they were given portable smart meters that could help them track their real-time energy usage ‘live’. Participants welcomed the ability to monitor and manage their electricity usage. Feedback from the participants also indicated that households were looking forward to the further opening up of the electricity retail market for competition.
The next step is to develop and test the necessary infrastructure to facilitate retail competition. To this end, building on the results of the EVS, EMA has launched the Intelligent Energy System (IES) pilot project to develop and expand the smart metering concept in preparation for a nation-wide rollout.
Technology can be a powerful enabler and we will continue to support research, development and demonstration of cutting-edge energy technologies. EMA has embarked on a $10 million, first-of-its-kind project in South-east Asia to develop an intelligent micro-grid infrastructure with clean and renewable energy technologies on Pulau Ubin. This will allow the replacement of unreliable and polluting diesel generators and showcase how renewable energy can be environmentally, socially and economically sustainable for communities. EMA will also be conducting an electric vehicle (EV) test-bedding programme starting Sep 2010 to evaluate the costs, benefits and feasibility of adopting EVs in Singapore. The government will be providing support for the adoption of these vehicles.
The $60 million Centre for Sustainable Energy Research (CSER) at the Nanyang Technological University (NTU) will focus on wind and marine renewables, green buildings, energy storage, and fuel cells. Leveraging on NTU's existing strengths in power engineering, power electronics, materials and aeromechanical capabilities, CSER will diversify Singapore's clean energy landscape and help Singapore develop a more comprehensive industry cluster.
A Globalised Economy
MTI is committed to promote international trade, facilitate the internationalisation of our companies and advance Singapore’s economic diplomacy. Through our programmes to promote international trade, accelerate regional economic integration and tap on overseas markets, MTI continually seeks to expand Singapore’s economic space and provide opportunities abroad for our companies. In FY2010, IE Singapore is allocated with an operating and development budget of $92.61 million and $27.63 million respectively to promote trade and the internationalisation of our companies.
To achieve this outcome, we will undertake the following initiatives and programmes:
Promote international trade
WTO. The multilateral framework of the WTO remains the bedrock of Singapore’s trade policy as it provides access to multiple markets and underpins a rule-based global trading system. MTI will continue to actively support WTO’s monitoring of trade-related measures, and push for an early conclusion of the Doha Round of negotiations. We can expect continued Ministerial involvement in the DDA negotiations this year as members continue to advance the Doha Round of negotiations.
Bilateral and regional FTAs. MTI will continue to build linkages with our trading partners through the negotiation of FTAs. The FTAs that MTI will be negotiating in FY2010 include the EU-Singapore FTA (EUSFTA), Trans-Pacific Strategic Economic Partnership Agreement (TPP), the Egypt-Singapore Comprehensive Economic Cooperation Agreement (CECA) and the Costa Rica-Singapore FTA (CRSFTA). MTI will also be holding FTA reviews with China, India and the US, which will help to highlight areas for further liberalization in Singapore’s bilateral trade and investment with these countries.
In FY2010, MTI will work towards the implementation of the ASEAN Trade-in-Goods Agreement (ATIGA), the ASEAN Comprehensive Investment Agreement (ACIA) and the 7th Package of Commitments of the ASEAN Framework Agreement on Services (AFAS). To achieve the goal of an ASEAN Economic Community (AEC) by 2015, MTI will cooperate with relevant parties to ensure compliance and timely implementation of AEC commitments. MTI will promote the strengthening of ASEAN’s external linkages, and support the completion and review of all five comprehensive ASEAN+1 FTAs (with China, Republic of Korea, Japan, Australia, New Zealand, and India) to ensure compliance and comprehensiveness. Projects will be implemented to further enhance ASEAN’s economic engagement with the US through ASEAN-US Trade and Investment Framework Agreement (TIFA).
FTA utilisation. In FY2010, besides providing customized 1-1 FTA consultations and broad-based outreach, IE Singapore will continue to engage both local and overseas trade associations to ensure wide dissemination of FTA information and materials, and increase the utilization of FTAs. IE Singapore will also increase outreach events that focus on sectoral topics to importers of Singapore-made products in key FTA countries. Furthermore, IE Singapore will also drive capability-building initiatives such as the FTA Certification Programme, and champion exporters’ feedback relating to new and existing FTAs.
Global trading hub. In FY2010, IE Singapore will continue its efforts to grow Singapore as a global trading hub. IE Singapore will focus on the following sectors: energy, agricommodities, and metals & minerals, to entrench Singapore’s position as a leading trading hub in these sectors, and build on the strategic sectors of carbon and LNG. IE Singapore will seek to promote major trading companies from Asia and other emerging markets to be established in Singapore, and encourage trading companies to conduct both offshore trade and re-exports from Singapore. IE Singapore will continue to enhance our trading infrastructure, including our risk management environment, trade financing environment, and trading talent development.
Accelerate regional economic integration
Regional Economic Integration (REI) continues to be high on the APEC 2010 agenda with host Japan putting greater emphasis on developing the pathways towards the eventual Free Trade Area of the Asia Pacific (FTAAP). APEC economies have noted the potential of the Trans-Pacific Strategic Partnership (TPP) as a pathway to FTAAP. As such, the expansion of membership of TPP and setting the stage for it to be declared as the FTAAP building block will be a key priority for MTI in FY2010. In addition, arising from the discussions during Singapore’s 09 APEC Chairmanship, APEC economies have realized the value of having REI focused on behind and across the border issues as these assist businesses in reducing costs. MTI will be supporting business efficiency initiatives at APEC i.e. Ease of Doing Business and Supply Chain Connectivity.
ASEAN centrality. We will continue our work towards a balanced, open and inclusive regional economic integration architecture through our participation in the ASEAN+6 or Comprehensive Economic Partnership in East Asia (CEPEA) and the ASEAN+3 or East Asia Free Trade Agreement (EAFTA) processes. These are important building blocks to ensure ASEAN centrality in the regional economic integration processes. To this end, MTI will work closely with ASEAN and +6 dialogue partners under the newly established Working Groups focusing on Trade in Goods, Trade Facilitation and Economic Cooperation.
Tap overseas market opportunities
MTI will continue to pursue our bilateral economic engagement initiatives via G-to-G platforms and B-to-B platforms to assist Singapore companies tap opportunities overseas. These include collaboration with Indonesia on the Batam Bintam Karium Special Economic Zone (BBK SEZ), the Singapore-Vietnam Connectivity Agreement, the Joint Council for Bilateral Cooperation (JCBC), the China-Singapore Joint Investment Promotion Committee and Suzhou Industrial Park Joint Steering Committee (SIP-JSC) meetings with China, the Russia-Singapore Business Forum, the Qatar Singapore High Level Joint Committee (QSHLJC), Singapore Saudi Business Council, Libya Singapore Joint Working Group (LSJWG), the Abu Dhabi Singapore Joint Forum, the Singapore-Mercosur MOU Consultative Group and the Singapore-Brazil Joint Committee on Trade and Investment.
IE Singapore will continue to help Singapore-based companies to gain market access to our key markets, which include China, India, Southeast Asia, and emerging markets of Middle East, Brazil and Russia. IE Singapore will also explore frontier markets, such as Africa. IE Singapore will be stepping up efforts in collaborating with its partners, including Trade Associations and Chambers (TACs), and international organizations, such as the World Bank, and International Finance Corporation.
IE Singapore will continue to encourage Singapore-based companies, including SMEs, to continue to build internationalisation capabilities and to conduct overseas business development. In FY2010, IE Singapore will ramp up the Exporter Development Programme, introduced in May 2009, to benefit more aspiring small exporters, including working with TACs to run the programme. The recession measures to facilitate access to cross border financing, and to provide financial support for capability development and market access, which were introduced in 2009 will continue to run through 2010.
An Entrepreneurial Economy
Small and Medium Enterprises (SMEs) are a key driving force in our economy. They employ six out of every ten workers and contribute close to half of our national gross domestic product. They are also an important source of innovation, bringing new technologies to market. In light of the economic downturn, SPRING will continue to focus on supporting SMEs and start-ups through enterprise upgrading and growth (especially in the areas of productivity, technology innovation and service excellence), facilitate access to financing and promoting a pro-enterprise culture.
To achieve this outcome, we will undertake the following initiatives and programmes:
Encourage entrepreneurship and developing a vibrant SME landscape
Enterprise upgrading and growth. To position our SMEs for recovery, MTI and SPRING work with various partners to help enterprises raise their productivity through developing their capabilities and management expertise. SPRING’s programmes build capability both on the enterprise and industry level, providing funding and assistance in strengthening enterprise capabilities in branding, business excellence, management systems and processes, as well as intellectual property management. Three new programmes were rolled out in FY2009: the Design Engage Programme which provides enterprises with resources to grow their business through design, the HR Capability programme, which strengthens SME’s human resource management by identifying gaps and promoting the implementation of best practices, and the Business Advisors Programmes which attaches experienced PMETs to high growth SMEs on short term projects.
At the same time, we are stepping up our efforts with the various Trade Associations and Chambers to enhance their SME members’ resilience and capability to stake out favourable positions for the upturn. These include rallying SMEs to raise their productivity, quality and standards, and encouraging them to seek new markets overseas.
Over the last year, we have seen many instances of local entrepreneurs who have taken on the challenges of the economic climate and seen the recession as an opportunity to better position themselves for growth.
Entrepreneurial culture. To sow the seeds of entrepreneurship, two new schemes (YES! Schools and YES! Startups) had been launched to provide support for both the commercialisation of innovative ideas as well as the ignition of interest in entrepreneurship among youths. The $75 million Technology Enterprise Commercialisation Scheme launched by SPRING to provide technology entrepreneurs and SMEs with early-stage funding support on their R&D projects supported another 30 technology start-ups this year while the Incubator Development Programme which aims to develop the domestic incubator landscape through enhancing existing services and building up value added services supported five full-suite incubators and another five venture accelerators. We will continue to nurture start-ups.
Access to financing. The government introduced new financing schemes under the Special Risk-Sharing Initiative (SRI) and the enhancements to existing financing schemes at the onset of the global economic downturn at the beginning of 2009. With the current improving global economic situation and the Singapore economy, these financing schemes have been extended for another year at revised terms in tandem with economic recovery. The government expects to support up to $8.4 billion of new loans till end-Jan 2011.
The SRI and the enhanced business financing schemes have catalysed more than 14,000 loans1 worth about $8 billion since December 2008. More than 13,000 companies, of which more than 90% were SMEs, have benefitted from these schemes. The total amount of loans given was about 5.5 times more than the loan amount given out under government-assisted schemes over the one year period prior to the changes.
Pro-enterprise environment. We are committed to creating a pro-business environment to facilitate business creation and growth. The EnterpriseOne (One Network for Enterprises) portal, a key outcome of more than 30 government agencies’ collective effort, offers enterprises help in getting the answers they need to start, sustain and grow their businesses. The EnterpriseOne portal also offers the award-winning Online Business Licensing Service (OBLS), offering an innovative “One Form, Multiple Licences” application with concurrent and accelerated approval processing by government agencies. Another public service innovation, the Pro-Enterprise Panel (PEP) is a public-private partnership chaired by the Head of Civil Service to actively seek and act on feedback on rules and regulations which stifle entrepreneurship. Singapore has been ranked in 2009, for the fourth consecutive year, by the World Bank as the easiest place in the world to do business.
A Diversified Economy
MTI aims to build a diversified economy so as to better insulate Singapore from sector-specific shocks, and to ensure that the Singapore economy is driven by multiple engines of growth.
Singapore will be a compelling global hub for business, enterprise, innovation and talent across a wide range of manufacturing and services activities. EDB promotes and develops capital-intensive, knowledge-intensive and innovation-intensive economic activities in order to deepen existing clusters as well as spur development in new growth areas. STB develops our tourism offerings to ensure that tourism remains one of our key engines of growth. Together, their efforts create good jobs for Singaporeans and add vibrancy to the city.
To achieve this outcome, we will undertake the following initiatives and programmes:
Grow manufacturing and services
Not withstanding the global downturn, Asia’s growth prospects continued to generate investment momentum for Singapore.
In 2009, EDB attracted total Fixed Asset Investment (FAI) commitments of $11.8 billion and total Total Business Spending (TBS) commitments of $6.8 billion from both manufacturing and services projects. These projects were expected to reap $12.5 billion in value-add per annum and created some 15,200 skilled jobs.
We attracted many business HQs from Multi-national corporations and Asian enterprises such as Huntsman Textile Effects Global HQ from the US and AAC Acoustic Technologies International HQ from China. In addition, EDB continued to secure many high quality projects in 2009 that are capital, knowledge and innovation intensive. This will strengthen our key clusters such as electronics, chemicals, transport engineering and biomedical sciences as well as help Singapore make inroads into new areas such as lifestyle. One example was Rolls Royce, one of the largest aerospace engine manufacturers in the world, which announced a long-term commitment to manufacturing their high-end products in Singapore. Other companies including Tata Communications, Lanxess, Baxter, Tech Semiconductor have also made significant investments into Singapore.
The global slowdown was an opportune time for Singapore to retrain and develop our workforce in preparation for the upturn. Companies have benefitted from workforce development schemes administered by EDB. Many companies and thousands of workers will be better positioned to take on the challenges in the new economic climate.
With the economic recovery and the push towards a new strategic direction to leverage on the growth of Asia, EDB is cautiously optimistic that investment commitments in the coming year will be comparable to 2009. EDB forecast a Fixed Asset Investment commitment of $10-$12 billion and Total Business Spending commitments of $7-$9 billion, thereby creating 14,000 to 17,000 skilled jobs for 2010. To help achieve its target, EDB will be provided with an operating and development budget of $121.35 million and $511.54 million respectively.
EDB has worked hard to ensure that Singapore is a competitive and compelling host for local and international companies. For the next stage, EDB will launch the “Host to Home” initiative. Under this initiative, EDB has identified three key pillars: “Home for Business”, “Home for Innovation” and “Home for Talent”. With these in place, Singapore will be able to offer businesses exceptional value. To aid value creation and drive new innovations, the spotlight will be on creating a matching ecosystem and world class science and technology infrastructure. Recognizing that human capital is crucial to actualizing these strategies, Singapore will continue to invest in developing local talent and attracting top global talents.
We will continue to enhance Singapore’s status as a global centre for high value manufacturing and services. Manufacturing will be maintained at 20-25% of the economy but with a greater emphasis on anchoring complex, cross-disciplinary manufacturing activities, and on activities arising from the convergence between manufacturing and services.
There is an opportunity over the next 5-10 years to anchor Singapore’s status as the Global-Asia hub, and become the key base for global players seeking to tap into opportunities offered by a rising Asia, and for Asian enterprises looking to expand beyond their home markets. EDB will contribute to building this diverse corporate landscape – one that comprises a mix of large and small companies; local, Asian and global – to create multiplier effects through strong partnerships and networks between these companies. These synergies will enable our companies, including local SMEs, to better capture emerging opportunities particularly in Asia, and allow Singapore to entrench its position as a location of choice for the world’s leading companies, including MNCs, global mid-sized industry leaders looking at Asia for their next state of growth, and innovative and globally competitive Asian enterprises seeking to internationalise.
Tourism. Tourism plays an important part in Singapore’s drive to become a leading global city. The tourism sector generated about $12.40 billion in tourism receipts in 2009, registering a contraction of about 18% over the record receipts of $15.17 billion in 2008. 2009 was a challenging year for tourism with visitor arrivals affected by both the downturn as well as the global H1N1 situation. STB rolled out a $90 mil initiative called Building On Opportunities to Strengthen Tourism (BOOST) to bolster demand in the sector during the downturn whilst ensuring the continued build-up capabilities to capture growth opportunities in the upturn. Under BOOST, STB partnered stakeholders in a targeted marketing campaign with the theme “2009 Reasons to Enjoy Singapore” and provided enhanced support to attract events to Singapore.
Singapore successfully hosted the second FORMULA 1™ SingTel Singapore Grand Prix together with the inaugural F1 Rocks™ concerts in September. The Singapore F1 race continues to be unique as the only full night race in Formula 1 and the only street race in Asia. The events generated a surge in visitor arrivals and enhanced the Singapore brand internationally.
Singapore consolidated its position as the world’s preferred business events destination by clinching the top spot in the “Top International Meeting City” category in the Union of International Associations (UIA) 2008 Global Rankings for the second consecutive year. Singapore also moved one notch up from 2007 to clinch third position in the “Top International Meeting Countries” category behind USA (ranked 1st) and France (2nd).
STB started the construction of Singapore’s International Cruise Terminal in Marina South, and worked with Wildlife Reserves Singapore to commence the development of a River Safari wildlife park in Mandai.
Alongside the global economic recovery and the opening of the two Integrated Resorts, tourism receipts in 2010 are expected to reach a record $15.90 billion. STB has been working with the industry to update Singapore’s approach to tourism which will be unveiled later this year. In FY2010, STB is allocated with an operating and development budget of $198.39 million and $252.25 million respectively.
Photo courtesy of Marina Bay Sands. All rights reserved.
Source: Resorts World Sentosa
To find out more about the Ministry of Trade and Industry and our initiatives, please feel free to visit our website.1 To achieve economies of scale, LNG will be imported by a single entity known as the LNG aggregator for the first 3 mtpa.