PHNOM PENH: Singapore’s Trade and Industry Minister Lim Hng Kiang has said the pipeline of investments coming into Singapore continues to remain strong.
He made the point to the Singapore media on the sidelines of the ASEAN Economic Ministers meeting in Cambodia, a day after the Ministry of Trade and Industry (MTI) released the country’s latest economic numbers.
MTI has forecast that Singapore’s GDP growth for 2012 would be around 1.5 percent.
There are two key reasons for Singapore’s economic growth slowing down, said Mr Lim.
First is the external condition, when growth is slowing down in Singapore’s big trading partners like the US, Europe and Japan.
On the domestic side, Singapore is undertaking a major restructuring process like the tightening of foreign labour.
Despite these situations, Mr Lim said Singapore’s investment targets are on track.
He added that the country also sets very high hurdles for investments in terms of value—add, and the number and types of jobs which the investments will create.
Mr Lim said there have been instances when some investment proposals had to be turned down.
"So if the investments don’t meet these hurdle rates we can’t give them land, and if they don’t have the land, they can’t invest in Singapore," he said. "We have to be very stringent and even with this very high hurdle rate we have this strong pipeline of investments."
Mr Lim went on to say: "You can look at it from the positive side or you can look at it from the negative side.
"From the positive side, the strong investment flow means good jobs created. On the negative side, it means greater pain in restructuring.
"As Singaporeans go for these better jobs, those jobs which are lower paying and less value—add will find that they cannot continue in Singapore.
"EDB is very confident that the pipeline of investments coming in continues to be strong. So the rest of the investing world looks upon Singapore very positively. We have a very strong story to tell, our own ecosystem is very competitive, we have the right regulatory framework."
Despite these positive outcomes for Singapore, what are the possibilities of the country entering a technical recession this year?
"It may come, there is no way we can predict. When we give the range of around 1.5 percent growth for this year, at the low end, it involves a technical recession," said Mr Lim.
But the minister stressed that there are bigger challenges in managing the Singapore economy and these include making sure unemployment is low and that Singapore continues to be competitive.
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