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Speech by Minister for Finance Heng Swee Keat at the Straits Times Global Outlook Forum on 5 December 2017

05 Dec 2017

Ladies and gentlemen


 Good morning,




  1. We live in rapidly changing times.


  1. Historically, changes in the global environment have brought new attitudes, jobs, and new ways of life. Whether it’s the Industrial Revolution in the 1800s, or the end of the Cold War, or China’s reform and opening up, these major changes affect all of us.


  1. In fact, change of any kind affects us in ways both big and small.  The Internet and smart phones change our daily habits in myriad ways.  So if there’s a change in the world order, the impact will be even greater.


  1. The late Mr Lee Kuan Yew, used to say that we must accept the world as it is, not as we wish it to be.


  1. As a small state, Singapore has limited influence to shape the world to suit our own needs.  To succeed, we must be pragmatic and have a strong sense of reality.


  1. But this does not mean that we stay passive.  On the contrary, we must plan, adapt and make the best of the world. We need to act purposefully, guided by a set of ideals and values.


  1. Knowing when and how best to act purposefully requires a view of the future.


  1. While none of us can foretell the future, we must keep an open mind, to look ahead, so that we can be better prepared.


  1. On that note, I must thank Warren and the ST team for bringing everyone together today to discuss this.


  1. I will propose some ideas on how we can think about the future, and suggest, not what we need to do, but what we need to have as a nation to secure our future.


Thinking about the Future


  1. So what will the future look like?


  1. There are many consultants, scenario planners, futurists and so on who can give us a very detailed analysis.  Each of you will also have your own views.


  1. We can be sure of one thing: the future will not turn out according to any prediction we can make today. 


  1. History has presented us with so many surprises that we should be humble to accept that we cannot foretell the future.


  1. Analysts can try to capture the future in terms of time frames (next 5 years, next 10 years, next 20 years, next 50 years) or they put things in terms of themes (social, economic, security), or even grander ideas (clash of civilisations, next industrial revolutions) – and so on.


  1. Each of these has its value.


  1. But for most of us, I believe we will have 3 key concerns:


  1. Amid these changes, can we make a good living?


  1. Can we have a good life?


  1. And, can we make a difference to the lives of others?


  1. The Government too has to take the long-term view, in order to create the conditions for our people to have the strengths, opportunities, and space to pursue these  aspirations


  1. To the first question, what will affect whether we can make a good living?


  1. The economy is the key factor. 


  1. The global economy is growing.


  1. Our Singapore economy is also picking up.


  1. But for the medium term, there are major changes happening. major structural changes, that will take years before we see the full effect – the rise of China, India and the Asian region, China’s Belt and Road Initiative, improved trade connectivity between Europe and Asia, ASEAN’s own growth, and shifting attitudes over whether countries should trade or close their doors to the world. Each of these development will bring very signifcant impact.


  1. And advances in technology can take away some existing jobs, or they can help workers to do their jobs better, and create new jobs.


  1. Ageing is a very important factor shaping whether we can make a good living.


  1. At the most basic level, an ageing population means our workforce shrinks and our growth slows.


  1. But there are things we can do – identify roles that play to the strengths of more experienced seniors, raise the productivity of an older workforce, grow the economy through innovation and internationalisation.  This will take a concerted effort from all of us.


  1. Let me now turn to the second question:  What can affect whether we can have a good life?


  1. Safety and security are critical to whether we can live in peace, and enjoy our relationships in harmony. 


  1. On the global security front, we see some progress, but the threats remain persistent, dispersed, multi-national, and evolving in complexity. 


  1. How ISIS and other militant groups fare in further parts of the world and in Southeast Asia, regional tensions, and cybersecurity risks will  affect our lives.


  1. If violence, division, and hatred are brought onto our shores – and if we fail to respond effectively, we will not have a home in which to live good lives.


  1. Climate change is a big question mark in whether we can live good lives. 


  1. The quality of our lives and our homes will depend on how well we can prepare ahead for more extreme weather conditions.  This will take very long range forethought, and the means and will to invest in our infrastructure.


  1. And to the third question:  what will affect whether we can make a difference to the lives of others?


  1. Making a difference to the lives of others will involve a combination of all the above: economy, demographics, security, environment, and how they interact with one another.  More importantly, it depends on how we respond to these changes.


  1. To be able to make a difference to the lives of others requires stability, security, peace in our environment, and strength, confidence, and grit in ourselves.  Both need to be built up, can be built up, if we take the long-term view, and invest in our people and our home.  


  1. There are 3 notes of caution I should sound, when we try to look into the future: 


  1. First, we must never make a straight-line projection from the present to the future.  The momentum may point towards a certain direction, but unexpected events can upset our projections.


  1. I think many of you here will remember that in the 1990s, the hype about the coming Asian Century ended abruptly with the onset of the Asian Financial Crisis.


  1. Second, we must see the opportunity amid change. Each trend carries threats and opportunities.  


  1. The entrepreneur and the innovator is the person who can see the opportunity where others see threat, and who can take action to realise that opportunity. 


  1. And third, we must not look at things in isolation.


  1. Reality is complex and multi-faceted.  All the forces I’ve just mentioned and many more, interact in unpredictable ways. 


  1. When I was working for Mr Lee Kuan Yew, he once asked me if I remembered a news article he had sent me from 6 months ago.  Sheepishly, I had to admit that I could not.  He then explained to me the link between that article, and an article he had just read that day.  I was struck by the connection he made.   So I took some time to try to understand how he made those connections.Over time, I realised that this was one of Mr Lee’s defining qualities – his ability to make connections between seemingly unrelated things.  I think he had a mental map of the world in his head, and was constantly seeking new information, to better understand the interactions, so as to confirm or reshape that map. That was why officers who attend meetings with him had to come prepared as he had a strong mental map of how the world works. This was one quality, together with long-term thinking, that allowed Mr Lee to position Singapore to change ahead of time.


Preparing for the Future


  1. Having spoken about thinking about the future, let me now turn to preparing for the future.  How do we prepare for the future, when there are so many unpredictable and complex changes ahead?


  1. Earlier, I spoke about how most of us care about whether we can make a good living, live a good life and make a difference to others.  Changes around us will affect all these 3 goals.  If we project what matters to us at the national level, it can translate into 3 action areas:


  1. We develop an adaptable and innovative economy;
  2. We nurture a caring and strong society; and,
  3. We build a secure and resilient Singapore


  1. Developing an adaptable and innovative economy is what we are working on in the Future Economy Council.


  1. At the economy level, we are driving innovation, internationalisation and connectivity to keep our economy vibrant, open and connected to the world.


  1. We are strengthening our enterprises and industries through the Industry Transformation Maps.


  1. And we are enabling Singaporeans to stay relevant through SkillsFuture and make lifelong learning a way of life.


  1. When it comes to our society,


  1. We envision a caring, cohesive, strong society, where we respect and care for one another, where we each play a role, and we all move forward together.


  1. This includes our seniors, who will form a large part of our society as our population ages.  I hope we nurture a society where our seniors are valued, respected, engaged and happy.


  1. For our seniors – we are strengthening retirement adequacy, improving healthcare access and affordability, and building strong social networks through efforts like Community Network for Seniors. 


  1. We will continue to care for families by helping young Singaporeans own their first home and stepping up support for preschools.


  1. And Singaporeans must continue to partner one another, and contribute through philanthropy and active citizenry, to make Singapore a more caring and inclusive home. And on that note, I am very happy to see that ST has your Causes Week, profiling individuals and organisations for doing this good work.


  1. On the security front, we will continue to invest in our security, and collaborate with our neighbours, to keep Singaporeans safe against both conventional and unconventional threats.


  1. Through SG Secure, we are training all Singaporeans to play a part in preventing and dealing with terrorist attacks.


  1. We will make better use of technologies to prevent, detect and manage security incidents.


  1. Perhaps our best defence will be our people, the strength of ties and kinship that make up our social fabric. Through programmes such as the Community Engagement Programme, we can better guard against extremist ideologies.


  1. I have spoken about building an adaptable economy, a strong society and a secure Singapore. These are all major investments for the long term – major investments in our people, and in our future.


  1. On all these fronts, whether we can do well will depend very much on:
    1. How well we understand our own identity and values;
    2. How faithful we are to our values as changes put us under stress; and,
    3. How honestly and openly we as a people and a government converse with one other to figure out and act on the steps ahead together.


  1. And, it will depend on whether we have the means to put our visions and values into action.


  1. This will require us to preserve fiscal sustainability.


  1. This is about staying responsible and spending within our means. As expenditure increases and revenue growth slows, we must think of ways to manage expenditures and raise revenues.


  1. Fiscal sustainability is also about preparing for revenue risks in the face of technological changes and evolving business models.


  1. How do we do this for Singapore?     
    1. Our system must remain pro-growth.
    2. Our overall system of taxes and transfers must remain fair and progressive.
    3. We must keep our revenue base diversified. 


Creating the Future Together


  1. Now let me turn to creating our future together. We need to appreciate that reality is complex, multi-faceted and constantly changing.


  1. Dealing with such change can be difficult and disconcerting, as it requires us to constantly adapt and learn. 


  1. We cannot approach it as a technical exercise, of checking off a list of steps in sequence.


  1. This was a distinction made by Professor Ronald Heifetz at Harvard’s Kennedy School of Government. He observed that:


  1. Technical problems can be solved by good analysis and having the right resources,


  1. But, adaptive challenges require much more fundamental changes, in how we think and interact with others; and self-reflection, to clarify our own values and those around us.


  1. How should we approach the future as an adaptive challenge? We need three critical ingredients:


  1. Clarity of values;


  1. Good governance and good leadership; and


  1. High levels of social and cross-cultural capital.


  1. First, we need to always be clear about our values, as they provide us with the compass to navigate an uncertain future.


  1. What do we stand for?  What kind of society do we wish to build? 


  1. When I was working on Our Singapore Conversation, the many interactions with Singaporeans brought it across very clearly to me the values that matter deeply to Singaporeans.  We cannot answer any questions about how to respond to what’s happening around us, unless we first know what we hold dear inside us.


  1. For us, it is to build a fair and just society.


  1. A society where all of us, regardless of race, religion or background, have the opportunities to realise our aspirations, and be the best that we can be.


  1. A society that is adaptable and resilient, where we care for and trust in one another, and where we move forward together, whatever our starting points, whatever the future change we are navigating.


  1. Second, we need good governance and good leadership at all levels, whether in the private, public or people sectors.


  1. Our leaders must be guided by a mission – a mission to create opportunities  and build a better future together, with our people and for our people.


  1. We need to maintain a high level of trust, and do so by communicating our considerations, our challenges and our plans frankly and honestly.


  1. The consequences if we fail to do so are severe – loss of trust, a divided people, a society that turns inwards from the world and loses its ability to adapt and innovate.


  1. As cautionary examples, we need look only at the backlash against globalisation and surge in support for extremist populist parties in some developed countries, as citizens feel that elites in society have creamed off their fair share of the fruits of growth.


  1. Third, in creating the future, we need to provide the foundation for good governance, we need to build a high level of trust, for social and cross-cultural capital.


  1. Social capital involves the trust that the public has, in its leaders, as well as in each other – trust that as fellow Singaporeans, we will support one another as a community, and make personal sacrifices for the mutual good.


  1. This too featured prominently in Our Singapore Conversation. Many Singaporeans expressed their hope for a greater sense of togetherness – a revival of our kampung spirit.


  1. And this sense of identity came out strongly as we celebrated SG50 together, commemorating the progress we’ve made as a people, and reaffirming our shared vision for the future. 


  1. For Singapore, we should go beyond building domestic social capital.


  1. As a small nation, we have thrived on being an open and constructive player on the international stage. We must continue to stay open, and build the cross-cultural social capital and relationships that will allow us to harness the benefits of globalisation. We must encourage and support our young people, for them to learn more about the world.


  1. Indeed, this imperative to forge deep linkages with our overseas partners is one of the key strategies proposed by the Committee on the Future Economy. As individuals, firms and the Government, we must continue to build strong ties with our overseas counterparts, seek opportunities in new markets, and encourage the exchange of ideas and innovations. Only then can we create a better life for others and for ourselves.




  1. To sum up, I will quote one of our panelists in the next discussion, Professor Wang Gungwu.


  1. Prof Wang, in a recent interview, said and I quote: “If a country is united, and the people are all clear about what they believe to be the important things for their country to survive, if they can really work together to do that, I don’t think anybody can touch them.


  1. Singapore has done well so far. Since independence, our leaders and people have been clear about our values and priorities, and we have worked together to build the Singapore of today.


  1. Looking towards the new world order, or any change for the matter, we cannot turn in from the world, or turn away from one another.  Instead, we should stay open and connected to the world, and stay united as one people.


  1. We must continue to have confidence in our ability to do this together – to care for each other as we deal with change, to have the vision and optimism to invest in our long-term future, and the nimbleness to seize the opportunities that will come, and to managed the unexpected that will also come.


I look forward to hearing your thoughts. Thank you.