Speech by Mr Lawrence Wong, Minister for Finance, at Singapore Institute of Directors (SID) Directors Conference 2021 on 8 September 2021

Ms Wong Su-Yen
Chairman, Singapore Institute of Directors

Ladies and Gentlemen

Introduction

1. Thank you for inviting me to speak to you at the SID Directors Conference today. 

2. Covid-19 has ravaged almost every single economy in the world. 

a. No one would have thought that a tiny viral particle can bring the world to its knees.

b. But over the last 20 months, we have seen in real time the unfolding of a butterfly effect – a seemingly small change with large ripple effects and consequences.

c. We’ve seen the world come to a standstill, lockdowns worldwide, the closure of international borders, and major disruptions in the global supply chain.

3. It has been more than 20 months since the virus emerged.

a. No one knows how long the pandemic will last.

b. Some time back, I said it could take as long as four years.

c. At that time, some thought I was being overly pessimistic.

d. But in recent months, we’ve all seen how tricky this virus can be – how quickly it can mutate, and how easily it can pop up in ways you least expect. 

4. But after more than 20 months of fighting this virus, we have some reason to be optimistic.

a. Vaccines are working and are breaking the link between infections and severe illnesses.

b. Countries with high vaccination rates are looking at living with the virus.

c. Singapore too has embarked on our reopening plans – we have not gone for a big bang opening; but we are doing it in a controlled manner, watching carefully the number of serious cases needing oxygen and ICU care, as we take each step forward.

5. Likewise, many other economies in the region are stepping up their vaccination drives.  

a. So vaccination rates across ASEAN and Asia are steadily moving up.

b. This gives us confidence in the gradual reopening of the region. 

Asia’s Renaissance

6. All this doesn’t mean Covid-19 will go away. It’s far more likely that it will end up becoming yet another endemic disease that we will have to learn to live with, like chicken pox and influenza.  

7. So we can’t talk about post-Covid anymore, because Covid will continue to be with us.  But at some point, the pandemic will end, and we must start preparing now for this new post-pandemic world.

8. The theme of this year’s conference aptly describes what we hope to be one of the central features in this new landscape – an Asian renaissance. 

a. If we look back in history, the European Renaissance was a period of great flourishing, learning and discovery.

b. Before that, the world too was struck by a pandemic. In the 14th Century, the Bubonic Plague devastated Italy, including the city-state of Florence. Some estimates indicate that the plague killed more than half of the population in Florence.

c. Yet, Florence bounced back and sparked the start of the European Renaissance.

9. History doesn’t repeat itself but it often rhymes. So if history is a guide, then Covid-19 could be the crisis which sparks the next generation of Asia’s growth.

a. In fact, most Asian economies are expected to recover to post-pandemic economic levels by end of this year.

b. This is because the fundamentals driving Asia’s economic growth have not changed.

c. Most emerging Asian economies have the necessary human capital. Their workforces are generally young, and becoming increasingly educated.

d. Regional economies have also continued with rapid urbanisation. The centralisation of capital, labour and information in urban areas, will lead to significant productivity and economic gains.

Capitalising on key drivers in the post-pandemic world

10. Beyond these strong fundamentals, we also need to position ourselves well to take advantage of the new drivers of growth in the post-pandemic era.

11. One of the pandemic’s most enduring impact will be to accelerate the dynamics that are already present in society. 

12. In other words, this great pandemic will also be the great accelerant – speeding up changes that are already happening around us. 

13. It’s not just vaccines that will move at warp speed. Digitalisation is also moving at warp speed.  Indeed, throughout this pandemic, we have seen a rapid acceleration of digital products and services.  

14. Two years ago, I had not heard of Zoom, and scoffed at the idea of having virtual meetings, as I had always preferred having in-person face-to-face discussions.  Today, nearly all of my work meetings are conducted online, and I’ve found them to be equally effective in getting things done. I’m sure many of you share a similar experience. 

15. The larger point is that the traditional barriers to digital adoption are falling, especially in industries that have been slow to adapt before.  So we are likely to see an acceleration of digital transformation in sectors like energy, construction and other domestic services, where there are still many opportunities for digital solutions to generate new value and productivity gains.  

16. Covid-19 has also accelerated other trends, including the importance of environmental, social and governance (or ESG) issues in business.  

a. There is a discernable change in the international environment.

b. Three decades ago, we had the “Washington Consensus”. It was a collection of free market ideas that were being promoted around the world. They built on the belief that the invisible hand of the market would result in the general good of all. As the economist Milton Friedman used to say, the sole purpose of business is to generate profit for shareholders.

c. Now governments everywhere recognise that globalisation and free market competition create efficiencies but also vulnerabilities. 

d. We know that left to market forces, the fruits of growth will not be so evenly distributed. We also know that corporates will always tend to optimise from their own perspectives, and may not maximise the common good. 

e. So there is a greater role for the government to step in, and work with the private sector, to address our collective concerns, be it for more resilient supply chains or to tackle the threat of climate change.  

17. All this is a positive catalyst for ESG.  ESG was once seen as a niche. Now it is increasingly mainstream.  Investors worldwide are starting to use ESG matrices in measuring the sustainability of their investments.

18. Compared to Europe and America, Asia has been somewhat of a laggard in ESG investing.  But post-pandemic, I have no doubt that we will see Asia catching up.  

19. Governments throughout the region are all determined to build back better – with focus on inclusion for vulnerable segments, as well as a greater push for resilience and sustainability in their economies.

20. Singapore has and will continue to capitalise on these trends.  

a. We will invest heavily in our digital infrastructure, including the expansion of our 5G coverage to all of Singapore by 2025. We will continue to help our enterprises and SMEs go digital and better harness new techologies.  

b. We are making our supply chains more resilient and strengthening Singapore’s position as a hub for international commerce.  

c. We have launched the Singapore Green Plan with ambitious targets over the next decade. We will press ahead with  additional measures to de-carbonize our economy, and to achieve net-zero emissions as soon as possible.  

d. We are also capitalising on new growth opportunities in sustainability, including in areas like AgriTech and Green Finance.  

21. Over the past 20 months, we have continued to strengthen our value proposition as an attractive place for business. 

a. Companies everywhere recognise the Singapore brand name. They know that in Singapore, they can be assured of a stable operating environment backed with good governance.

b. That’s why despite the challenges last year, Singapore attracted about $17 billion worth of investments – the highest in more than a decade.

c. Companies like GlobalFoundries, Sanofi and BioNTech have all recently committed multi-billion dollar projects here. 

d. We will continue to further enhance the Singapore brand and our value proposition to bring in more investments, to grow the pie, especially amidst this new competitive environment. 

Calling upon businesses to adjust to the post-pandemic world

22. Singapore as a whole is making these adjustments to the post-pandemic world.  At the firm level, there is a need for adjustments too.

23. The winners from this pandemic will be those that have used the impetus of the crisis to accelerate their digital transformation, and to accelerate their moves towards more innovative, more productive solutions that are also sustainable.

24. Some of our local companies are already leaders in these areas, keeping pace with the best in the world.  But there are others who continue to lag behind.  

25. When I speak to these business leaders, some of them tell me they are struggling to survive, and to deal with basic issues like manpower shortages and the cost of doing business, and so they don’t have the bandwidth to worry about other matters.

26. But if we do not start thinking ahead and acting now, the gap between leaders and laggards will continue to widen, and the need to restructure and transform will likely increase in the future. 

a. So firms have to continually innovate. They have to look at ways to optimise their operations, reconfigure processes to be more efficient, and to bring productivity up a notch.  

b. They should also look at ways to expand beyond our borders to scale up and venture into new markets or to reconfigure the operations by tapping fully on the comparative advantages of our neighbouring countries.  

c. For some businesses, there may be a need to pivot to adjacent emerging sectors; for others, this might be the right time to consolidate and merge to become stronger.

d. All this is part of the creative destruction we see in any dynamic economy – where firms with new ideas and innovation will render existing models obsolete, and thus replace existing jobs and activities. This ensures the continued renewal and rejuvenation of our businesses.

27. All of you play an important role in this process.

a. As directors of companies, you help to provide good governance, strategic oversight and ensure the long-term success of the companies you oversee.  

b. You have to continually ask yourself – is your company ready for the post-pandemic world? Are there ways you can reinvent your business to stay competitive, and to make full use of new trends?

28. We must work together in this transformation journey for Singapore Inc and also for our business sector. We all know the saying: if you want to go fast, go alone. But if you want to go far, go together. Indeed, Covid-19 has emphasised the importance of solidarity, and progressing together; the crisis has shown us that we are stronger when we stand together. 

a. No doubt, there will always be healthy competition in the marketplace.

b. But there are also many opportunities for firms to come together to collaborate for win-win outcomes. 

c. More importantly, the Government stands ready to partner all of you in your transformation journey.

d. Make full use of our programmes to adopt new digital solutions, or to upskill your workers.

e. We have a new partnership approach called the Alliances for Action, where the private sector takes the lead to explore and execute new ideas in collaboration with the Government.

f. If your companies have good ideas and are willing to take the lead to make a difference, I encourage you to get in touch with the relevant government agency to explore opportunities.

Conclusion

29. To conclude, the pandemic may have closed some doors, but it is opening many others.  It has created the possibility for change and reform. It is up to us to seize this opportunity and to shape a fairer, greener and more inclusive future together.

a. The Renaissance painter and inventor Leonardo da Vinci once observed, “Knowing is not enough; we must apply. Being willing is not enough; we must do”.

b. So we cannot sit back and just hope for the best. We must be the ones to make things happen and usher in a new renaissance for Asia and for Singapore.

30. Thank you very much.