Singapore reviews economic strategy, 5 committees to publish recommendations by mid-2026

Key Concepts:

• Economic Strategy Review (ESR)
• Global Trade Upheaval (US Tariffs)
• Long-Term Competitiveness
• New Engines of Growth and Innovation (AI)
• Workforce Preparedness
• Local Firm Development
• Investment Attraction and Anchoring
• Supply Chain Shifts
• Capital Market Dynamism
• Regional Investment
• Economic Resilience
• Trade-Based Economy
• Manufacturing Value Added

1. Overview of Singapore's Economic Strategy Review

Singapore is conducting a review of its economic strategy in response to global trade disruptions caused by US tariffs. Five committees have been established to address key areas and develop strategic recommendations by mid-2026. The goal is to position Singapore's economy, businesses, and workers to adapt to the evolving economic landscape.

2. Committee Focus Areas and Objectives

• Long-Term Competitiveness: Chaired by Acting Transport Minister Jeffrey Seiao and Senior Minister of State for Trade and Industry Lo Yan Ling, this committee aims to attract and anchor new investments while capitalizing on opportunities arising from shifting supply chains. The focus is on pursuing new growth areas, backing high-potential companies, and taking calculated risks, even if it means accepting greater economic volatility.
• New Engines of Growth and Innovation: Led by Minister of State for Digital Development and Information Jasmine Laauo, this committee will explore the potential of new growth engines and innovation in the future economy. A key focus is building an ecosystem to foster AI innovation by helping organizations grow their capacity and capabilities. The committee will study ways to encourage enterprises to drive innovation and undertake sophisticated innovation activities in Singapore.
• Workforce Preparedness: Acting Minister for Culture, Community and Youth David Neo and Senior Minister of State for Manpower Copun are in charge of preparing workers for shifts in the global economy. The aim is to strengthen the link between career training and career outcomes to sustain real wage growth, which has been over 2% year-on-year after accounting for inflation, with lower-wage workers experiencing better outcomes.
• Local Firm Development: Minister of State for Trade and Industry Elvin Tan will focus on helping firms start and sustain new ventures.
• Company Transformation and Restructuring: Minister of State for Home Affairs Gem Ming will look at how to help companies transform and manage restructuring.

3. Building on Previous Strategies

Deputy Prime Minister Gang Kim Yong emphasized that the committees will build upon the foundations laid by previous economic strategy reviews, such as the one in 2017. While those reviews remain relevant, the current challenges pose a significant threat to Singapore's trade-based economy. The committees will review existing strategies in light of the new global landscape.

4. Addressing Global Uncertainties

The committees will address uncertainties arising from global trade tensions, including the impact of tariffs and the responses of affected countries. The goal is to strategize and be nimble in the face of unpredictable policy responses, particularly from the US.

5. Short-Term Strategies

Dr. Tamar Bike, DBS chief economist, suggests that a short-term strategy should focus on reassuring traditional trading partners and emphasizing mutual dependencies. Singapore should reinforce its role as a key trading partner and investor in various regions, including ASEAN, emerging markets, developed markets, China, and the US.

6. Capital Market Dynamism and Regional Investment

Dr. Bike highlights the need to make Singapore's capital markets more dynamic to encourage the deployment of capital within the region. This includes high-net-worth individuals' accounts and large corporate entities. The goal is to make capital "stickier" in Singapore and the surrounding area, supporting the Singapore labor market, ecosystem, and infrastructure investment. This requires a more vital and dynamic equity capital market, debt capital market, and private equity market.

7. Indicators of Success

Key indicators to track the success of the strategies include:

• Continued investment from global MNCs and financial companies, indicating faith in Singapore's governance, logistics, and workforce.
• Progress towards targets set in previous reports, such as increasing manufacturing value added as a percentage of GDP.

8. SME Concerns and Expectations

The Association of Small and Medium Enterprises (ASMEs) believes the review is timely due to slowing demand and rising costs. They hope the review will lead to more inclusive growth and attract new investors, particularly from China, who have strong supply chains and manufacturing capabilities.

9. The Role of New Political Office Holders

The structure of the committees, with seven of the ten co-chairs being first-time political office holders, is intended to bring new perspectives and generate fresh ideas.

10. Key Quotes

• Deputy Prime Minister Gan Kimong: "We are definitely not abandoning the old strategies that we have. We are really building on the very strong foundation and fundamentals that we have accumulated over the years."
• Dr. Tamar Bike: "The very fact that uncertainty might be a permanent feature of the landscape going ahead is an important recognition... How do you strategize to be a little more nimble?"

11. Conclusion

Singapore's economic strategy review is a proactive response to global trade uncertainties. By focusing on long-term competitiveness, innovation, workforce preparedness, and regional investment, Singapore aims to adapt to the evolving economic landscape and maintain its position as a key global hub. The success of these strategies will depend on attracting continued investment, fostering a dynamic capital market, and effectively addressing the challenges faced by SMEs.