A Budget for Globalization

Few today can fail to appreciate the virtues of globalisation. But it also brings with it difficulties. Second Finance Minister Tharman Shanmugaratnam acknowledged this in Parliament yesterday, and then set about to detail how Singapore intends to face the challenges. Mr. Tharman's Budget speech should be seen as a blueprint for upgrading Singapore's economic infrastructure to drive continued prosperity. No less important, the nation's tighter embrace of globalisation is set to be accomplished with as much of the population being uplifted as possible.

As a small country, Singapore's fortunes always have hinged on its openness to foreign business and capital. Today, however, many larger countries also understand this. Competition is fierce and increasing. So Singapore must push harder. Thus, the corporate tax rate will come down, which should convince even more companies to set up operations here. Apart from large multinationals, measures in the Budget should also prove attractive to small and medium-sized companies, both home-grown and those from abroad. Singapore will also seek out fresh commercial openings by investing more in research and development. And to ensure that every company and institution - both foreign and local - will have enough skilled manpower to compete in the global marketplace, the Government plans to ramp up opportunities for life-long learning and training - well beyond what is already available. Through these and other initiatives, Singapore should be able to keep its economic growth robust. And this, in turn, is key to ensuring that it will be able to strengthen support for low-income earners at the margins of the new economy. Through the Workfare Income Supplement scheme, as Mr. Tharman put it, 'for the first time, the state will be supplementing the market wages that low-wage workers receive'. In addition, while a rise in the GST is needed to adjust for lowering of the corporate tax rate, an innovative plan will more than adequately compensate the poor for the new burden.

The aim of this Budget is to position Singapore for the future. A new economic infrastructure and innovative policies are being put in place. But at the end, how well they succeed depends on Singapore companies and individuals. Singaporeans must make use of the opportunities to grow or start new businesses, to retrain for new jobs and to take new risks. Do this much, and a bigger slice of global growth will come this way.