Speech by Minister Lawrence Wong at SICC AGM Luncheon
Jun 12, 2016
I am happy to join you for this AGM lunch.
Let me start by congratulating the newly elected Board of the Chamber.
We are very honoured in the Government to have SICC as a strong, close and longstanding partner. Over the decades, we have worked together to overcome many economic challenges, and we look forward to continuing the strong partnership with the Chamber and members of the Chamber as we embark on the next phase of development beyond SG50.
The Singapore economy is presently facing several headwinds. It is partly due to the external environment, which is slowing. It is also partly a result of domestic restructuring. This is a difficult but necessary process that we are going through.
Our economy is maturing and our resource constraints are starting to bite. These constraints are manifesting in areas such as the labour market, land and energy resources.
However, the resource constraints are not binding, and there are ways to overcome these. We need to be more creative, more innovative and more nimble in identifying new opportunities and growing the economy.
Ideas from CFE
This is why the Government had set up the Committee on the Future Economy (CFE) earlier this year. Our objective is to see how we can continue to keep our economy growing, to keep Singapore competitive and to continue creating jobs for our people.
Within the broad ambit of the committee, we have several sub-committees. One on Future Growth Industries and Markets, to identify what are the future growth areas; another on Future Corporate Capabilities and Innovation, because we need strong companies anchored in Singapore to create jobs and to innovate; a third one on Connectivity so that Singapore continues to be a global hub; fourth on Future City and infrastructure; and fifth on Future Jobs and Skills.
I co-chair the sub-committee on Future City, which covers the infrastructure we need to put in place to prepare for the future. I co-chair that committee with Mr Tan Chong Meng, who is the Group CEO of PSA International.
We have had several rounds of discussion over the last few months and many focus group discussions with different stakeholders. Today, I plan to share a few of our key ideas, and hope to get your feedback and suggestions over the dialogue later.
First, we are looking at how to strengthen Singapore as a distinctive global city. Global cities are anchored by a vibrant central business district. In Singapore’s case, our CBD has evolved over the years. Our present CBD has grown from Shenton Way to Marina Bay.
We do have options for further expansion of the CBD as we are planning to shift the ports from Pasir Panjang to Tuas in the West. When we do that, we will free up space in the Greater Southern Waterfront, which is next to the present CBD.
That whole space is three times the size of Marina Bay. It gives us more options to build an entire new waterfront city, which is seamlessly integrated with our present CBD. That core can expand and grow into a very vibrant and special area.
In addition to this central core, we are building a new CBD - a second CBD that will be located at the Jurong Lake District. That is an existing vibrant commercial centre. We will expand that area because the terminus for the new Kuala Lumpur-Singapore High Speed Rail will be located there.
We have a new plot of land, 100ha in size, which will be opened up for the terminus. It will be the gateway to Singapore, and will provide more land for future developments around Jurong Gateway and around the whole Jurong Lake District. This will be a unique CBD, because this provides a unique lake setting, with Jurong Lake Gardens located nearby. It will be a distinctive destination for business and leisure activities.
When the terminus for the KL-Singapore high speed rail is ready, it will provide convenient linkages to our own MRT lines. We are building more MRT lines to increase connectivity. From Kuala Lumpur-Singapore to Jurong Lake District, you can get to anywhere in Singapore easily and it will be seamlessly connected.
Besides having that strong central core, global cities are also defined by their connectivity. We will also enhance our urban infrastructure to strengthen our position as an aviation and maritime hub.
We are doing it at two wings of our island. On the Eastern front, we are expanding Changi Airport as an air hub, with the development of Terminal 5. On the Western front, I mentioned earlier that we are moving the ports over. We will have a new Tuas port, with new technologies to make it more efficient and productive.
Around these two terminals, the seaport and the airport, we will ensure that we have adequate land and infrastructure, to build an ecosystem of complementary industries to support our maritime, and our aerospace industries. There can be a complimentary suite of industries that will help to strengthen our hub status.
Second, even as we develop new growth areas for Singapore and for our economy, we are also looking at how we can co-locate related industries for better industry synergies.
This is not a new strategy. For example, Jurong Island was developed from a hotch-potch of islands and is now a petrochemicals hub.
Similarly, as we plan forward, there will be new growth areas, be it in clean tech, urban solutions, fintech, cyber security and e-commerce. We are planning ahead for land and infrastructure to cater for these new growth clusters. I will mention three, beyond the ones that you already know.
We could potentially have a growth cluster in Jurong, near the Jurong Lake District. This is at the Jurong Innovation District, and can be a centre for clean tech activities as many of which are already located there.
In Punggol, we can grow a cluster for creative and IT industries, co-located with the new Singapore Institute of Technology campus.
In Woodlands, we are making available more industrial land, clustering them together, potentially as a hub for advanced manufacturing. These are clusters that will develop over time.
Besides providing infrastructure and being ready for economic activities, the advantage of creating such clusters is to decentralise urban development.
In Woodlands, as we develop our industrial cluster, we will have a residential area, and an industrial area for light industrial activities, and there are jobs available so people can work and live in proximity.
Likewise in the West, with the Tengah new town coming up, you can have jobs and residential clusters all together. That is the other advantage of developing these growth clusters. That is our second strategy to develop new growth clusters, and we will do that sequentially as we develop new growth areas for the economy.
Third, we are looking at enhancing connectivity and capitalising on new mobility solutions. This is an area in which technology is rapidly evolving, with autonomous vehicles for example. We need to get infrastructure ready for the future, where eventually such vehicles will be deployed.
We are already doing plenty of trials for these autonomous vehicles. They can be deployed in different contexts. In industrial estates in which vehicles transport goods from one location to another, the work can be replaced in the future, with a goods mover system, based on automated vehicles.
We can go beyond that to people mover systems. Think about in 15, 20 years’ time - I think it is fairly possible that you could have a housing estate where there are autonomous people mover systems bringing people from where they stay to the nearest MRT stations.
We already have such systems being trialled. At Gardens by the Bay, you can go into one and it will bring you around Gardens by the Bay. It is already working. In 15 years’ time, it is highly possible to have something like this operating in our housing estates, and we have to prepare the next generation of housing estates with that kind of infrastructure.
That is work in progress, and we are thinking of how to get that ready. More broadly, I think with new technologies with mobility solutions, we can think about system-wide enhancements in our urban logistics. Today, urban logistics is done from a point-to-point, sender to recipient perspective,
If you go into a shopping mall, you have goods vehicles and trucks coming into the mall,, providing goods in a point-to-point way – it creates inefficiencies, traffic bottlenecks and results in heavy traffic usage. You could have a very different system instead of point-to-point. You could have a distribution centre where all the trucks go, and break bulk, and within that centre, you send goods into the mall. Far more efficient - and with technology and internet of things, it is possible to track every single item and have more efficient delivery. You can probably reduce the number of runs that the trucks do, because you can tag things together and make it more efficient. Delivery into the mall will also be more efficient because you will not have trucks coming in all the time, jamming up the place.
It is a fundamental overhaul of the way urban logistics is done; and potentially significant gains for businesses and significant reduction in traffic as well, so congestion on the roads can be reduced; but it requires a major rethinking of the way we do urban logistics. Some of this can even be done underground, and so we do not need to use surface land. It is a major transformation in urban logistics which we are studying, and I think it can potentially reap significant economic gains for us, not just for businesses but also enhance our status as a regional hub.
Fourth, this is a perennial issue for us, because we are always looking at how we can expand our land and space options. We have options. There is always the fear or concern that we are too small or we are running out of land. Indeed, the resource constraints are biting more and more, but we have options to create more land.
We have reclamation projects. The Tuas port is going to be on reclaimed land. We can also go underground such as the Jurong Rock Caverns, which provides storage for oil and petrochemical products. I think we are only starting to scratch the surface of the potential for underground developments. We have underground spaces for MRT lines, for shopping malls and underpasses, but there is a lot more we can do in terms of underground development beyond Jurong Rock Caverns.
For example, we can think of our utilities – all the power hub stations you see around developments in Singapore – a lot of them can go underground. It costs more, but it will free up surface land for development, and potentially from a cost-benefit point of view, it will be worth doing in the longer term. PUB is already studying underground reservoirs and underground water storage. That can potentially solve our water issue, and also save land. These are just some examples on how we can push the boundaries for underground developments and we are seriously looking at different areas to create more land and expand our space options for Singapore.
Finally, in the fifth area, we are looking at how we can ensure the sustainability and security of key resources, especially in energy and water. These are critical resources for all of us – us as Singaporeans and for companies as well. These are increasingly important in the future of climate change and global warming.
One thing for example in the energy space, which we have done, is building a LNG terminal. We have a LNG terminal in Jurong, which allows us to import gas from all over the world, and gas that is more competitively priced as well. That powers our electricity and provides gas for industries that need gas. We are looking at a second LNG terminal site, and identifying potentials for this site to be located and built so that we have more options for our future. Besides fossil fuels, LNG and gas, we are also looking at alternative energy sources. We are disadvantaged here because we do not have many options in terms of alternative energy, but wherever we can, we are pushing the boundaries and exploiting the limits.
For example, with solar power, you will see over the next 10, 20 years, a lot more solar panels on rooftops. This is already starting to become cost effective because the cost has fallen. HDB does a bulk tender for companies to deploy solar panels on rooftops. In the past, we had to pay money for companies to deploy solar panels, now companies will deploy the panels and it can make money off the savings from their electricity bills. Now when HDB does a bulk tender of deployment of solar panels, it does not need to cough up additional funds because it is cost effective today. Over time, with more of these tenders, we will see more of these solar panels on rooftops – public housing, commercial buildings, and we will push the limits.
There will be a limit as to how much energy we can derive from solar because it is not as though we have huge amounts of land to deploy a solar farm. There will be some limits but we can push the boundaries. With new R&D in energy storage, we can potentially make solar a more important part of our energy options than what it is today. We are also similarly looking at ideas for water, for energy, to provide security of supply. Not just in the short term, but over the medium and even the long term, in a world where there is global warming and climate change.
I have highlighted these preliminary ideas in a broad way.
Underpinning all of these ideas is the consistent theme of innovation. That is the way we have to think about the economy going forward. We can’t continue with linear growth in resources, be it in land, labour or energy. We can’t continue in a linear extrapolation of an increase in such resources as the economy grows. It is not possible or sustainable. We have to find new ways of doing it, to be more innovative and more productive. That is what the CFE is focused on, and that is what many of these ideas are about.
There is another theme that runs through all of our ideas and suggestions, and that is the fact that we need strong partnerships with stakeholders to realise these ideas. The Government cannot do it alone, and neither can the private sector. We need to work together, and we will have to think about new ways to strengthen public-private partnerships in order to start planning and investing in new infrastructure for our future. Because we are talking about large scale urban transformation, and the infrastructure that is needed will be considerable. We really need to start thinking about new modes, new platforms in which the public and private sectors can get involved together in making this infrastructure happen over the long term.
Infrastructure will be crucial to us as an enabler of growth, but it can also be a growth industry in its own right. If you look at trends around the world, countries are rapidly urbanising. Cities around the world are looking for urban solutions – sustainable and innovative urban solutions. Singapore has a solid reputation and track record. We have a trusted brand name. Companies can also develop their own track record - use Singapore as a test bed, as a living laboratory, and export these urban solutions to other cities. So urban solutions can itself become a growth cluster for the future; not just providing infrastructure for our own needs, but a growth engine in its own right in the future.
The plans that I have shared are medium and long term in nature. I know they may not necessarily address your immediate concerns. Some of you may face immediate pressures, be it in labour market tightness and prospects for the immediate term, but I believe these can be overcome. I think we should look beyond the horizon and start thinking about the medium term and the long term.
The plans will take several terms of government to implement. These are not five-year plans but that is a uniquely Singaporean competitive advantage. That is our advantage, which very few cities and countries are able to do; but we can, because we can plan long term and we have been doing so. We should capitalise on our competitive advantage and think about what we can do to strengthen our position for the medium to longer term.
I will say that is the way in which Singapore has been built over the last fifty years. We have, over the years, taken bold steps to build infrastructure and transform the economy. If we look at what happened fifty years ago, one of our founding leaders, Mr Goh Keng Swee embarked on a project to convert the swamps of Jurong into an industrial estate. At that time, everyone said it was a foolish endeavour and people called it “Goh’s folly” because it was bound to fail. But, Jurong Industrial Estate took off, it attracted many companies, created many jobs and that was the core of our industrialisation process. That helped our economy to take off.
Now, fifty years later, I think we will embark on more acts of folly. But, I think these are acts of faith. These are acts of conviction - that Singapore can endure, that we can thrive against adverse odds, that we can turn our vulnerabilities into strengths, and we can be beat the competition even if they may be tougher and bigger than us.
That is what we are hoping to do. In fifty years’ time, we will have a completely different Jurong; in fifty years’ time, we will have a completely different economy, and a stronger Singapore. I am optimistic that we can sustain our success in the years and decades ahead.
I want to leave you with these three final messages. Firstly, we are not limited by our physical size. Yes we are small, but I hope some of the ideas I have shared will give you some confidence that despite the constraints we face in terms of resources, we have options available. We have options for land, for labour, through innovation, through automation and technology; we have options for resources like water and energy.
We are not done building Singapore yet. There are many more things we can do over the next fifty years. We have many options to build our Future City. I look forward to partnering with all of you in this endeavour to make tomorrow’s Singapore even better than what it is today.