Think Twice Before Migrating - The Grass There Won’t Always Be Green

This is an excerpt from Prime Minister Goh Chok Tong's May Day Rally speech last Saturday.

(CHINA and India rising) is like Singapore being in the ring, doing battle with two heavyweight sumo wrestlers at the same time. Have you seen the advertisement of a scrawny man facing up to a big-sized sumo wrestler?

Can you imagine small-built Singapore taking on two sumo wrestlers - China and India - at the same time? We will be squashed like a hamburger.

But will we? Why should we stand still and be squashed? Why must we wrestle with them? Why can't we use taiji instead?

Those who watch gongfu movies may have heard of the Chinese martial arts stroke, or zhao: 'si liang bo qian jin' or 'use four taels to deflect a thousand pounds'. Using this stroke, the taiji master borrows the strength of the opponent to counter him.

Of course, we do not regard China and India as our opponents or think that we can defeat them.

What I mean is that we should see China and India as opportunities and ride on their growth. We should borrow their strength and grow with them.

That is why we encourage Singaporeans to go regional. That is why we visit China and India frequently to understand them, to work with them and to forge economic partnerships.

EXTRA POWER FROM THE GIANTS

CHINA and India can provide the additional power for our economy.

We are already benefiting, not just from our investments in these two countries, but also from their investments in Singapore. For instance, Singapore is becoming a launching pad for Chinese companies wanting to expand in the region and globally.

Sinochem International, the listed arm of Sinochem Group, a very large Chinese conglomerate, has recently established its overseas headquarters (OHQ) in Singapore.

This OHQ will manage all of Sinochem International's worldwide subsidiaries and businesses and also perform strategic planning and R&D.

India has rapidly emerged as the global hub for business process outsourcing. Recently, the Scandent Group, a big Indian company providing IT services and business process management, picked Singapore as the strategic base for its global operations.

Why? Because Singapore is physically well-connected with the rest of the world through telecoms, air and sea links. Singapore is a base for over 6,000 multinational corporations (MNCs). We also have 'connectivity' like free trade agreements with our major trading partners, close bilateral relations and a strong pool of human capital with understanding of international business practices.

So you see, we have many strengths. And one of our strengths is our ingenuity in overcoming problems.

But some Singaporeans do not see this. Because of the difficulties over the past few years, they felt a sense of hopelessness. Some even migrated.

Those who have migrated because they think the grass in Singapore is drying up will, one day, look back with regret. We will make our grass grow. No water for the grass? No problem. We have Newater.

Aha! But you may say, ours is cow grass which nobody wants. Golfers know that we have replaced cow grass with xoysia and Bermuda grass! We can solve our problems and upgrade.

Those who are thinking of migrating should think again.

Do not think that the grass is always greener elsewhere. They may be greener now. But will they always stay green? All economies go through economic cycles.

They may offer better prospects than Singapore now. But will it be always this way?

Besides, globalisation is here to stay. Wherever you are, you now have to compete because the world is one global marketplace. You cannot escape from competition whether it comes from China, India, or other more competitive economies.

In the case of Singapore, each time our economy becomes less competitive because of rising costs, we have the capacity to reduce our costs.

Not many countries can do that without social upheaval. We have cut our Central Provident Fund (CPF) twice before: during the 1986 recession and in 1999 in response to the Asian financial crisis.

And last year, we made major changes to our CPF scheme to maintain our cost competitiveness. In addition, we restructured our tax regime.

Our income tax rates, both personal and corporate, are among the lowest in the world. The Singapore dollar remains strong. It did not depreciate.

In fact, it has strengthened against the regional currencies. Our exports continue to grow and the current trade balance remains in surplus. And over the last six months, we have created 30,500 jobs, enough to replace all the jobs lost in the first half of last year.

The developed countries do not have the same capacity to cut costs. Nor can they respond so swiftly. Why? They do not have the same degree of harmonious tripartite relations that we have.

This is another core strength of ours.

During bad times, Singaporeans did not quarrel and fight over a shrinking economic pie. Instead, we bunched together like a rugby scrum and fought as a team. And together we grew the pie.

The trust between workers, employers and Government did not come by chance. It was carefully built up over more than four decades. We have a reputation for peaceful and cooperative industrial relations.

Last year, several thousand workers were laid off. The National Trades Union Congress (NTUC) handled over 5,000 of those retrenchments from 107 companies. NTUC helped workers get a fair compensation package. They also helped workers retrain and find new jobs. Thanks to NTUC and enlightened employers, there was no industrial strife.

When PSA Corp had to retrench 500 workers, the new chairman, Mr Stephen Lee, felt the pain. It was the first time PSA had to let go of so many staff. But it had no choice. It had to cut costs, reduce wages and increase productivity or see more shipping lines leave Singapore. PSA learnt its lesson from the loss of Maersk and Evergreen. It was not going to make the same mistake.

During the retrenchment exercise, the atmosphere was tense and emotional.

The industrial relations officer (IRO) who handled this, Ms Jessie Yeo, even cried. She was emotionally stressed. She wrote a report to NTUC secretary general Lim Boon Heng. Boon Heng was moved by it. He sent it to me to read to appreciate the contribution of union leaders and IROs.

PSA has regained its competitiveness because it took decisive action.

Despite the difficult conditions last year, we managed to attract $7.5 billion of fixed asset investment commitment in the manufacturing sector and nearly $2 billion of total business spending commitment in the service sector.

However, these figures are history. What of the future?

ON TOP RUNGS OF LADDER

I AM optimistic because of our strengths as a people.

If you compare the competitiveness of countries, it is not just about size or even the abundance of natural resources. If land mass and population size were the overriding success factors, all the big countries would also be the richest. But this is not so.

If natural resources were more important than people, then Saudi Arabia with its oil would be the richest country. It is not.

Countries with high per capita incomes are those with high quality human resources and efficient organisation, like the United States and Japan for the bigger countries, and Denmark, Finland and Switzerland for the smaller countries.

We have high quality human resources.

Now, one in five of every cohort of Singaporeans is admitted to our universities. Six out of 10 Singaporeans make it to polytechnic or university.

And we are customising our education system to maximise the potential and creativity of every Singaporean.

Also, we are topping up our population with able people from China, India and elsewhere. If we have able people and we are more united and better organised than others, we can remain on the top rungs of the competitive ladder.

The standard of living we enjoy will then continue to go up.

For those who do not make it to polytechnic or university, do not fear.

We run a competitive market economy where the more able will earn more. But we also run a compassionate social system where the wealth generated by the more able is shared with the rest of the population.

Housing, education and health-care services will always remain within your reach. And from time to time, when we have budget surpluses, we will share them with you, with the lower-income Singaporeans getting more than the better-off Singaporeans.

And we will continue to pump in millions to upgrade your skills, to train and retrain you.