Singapore's longer-term worry is talent: SM Goh

Singapore's longer-term worry is talent: SM Goh

Posted: 06 July 2007 1547 hrs


Singapore's current property bubble is a short-term phenomenon that is not a cause for worry, said Singapore's Senior Minister Goh Chok Tong, neither is rising costs as it will mean a higher standard of living and more income in real terms.

The real longer-term worry is its talent pool and how Singapore will grow.

Making these points in an interview brodcast by CNBC as part of a special report on the anniversary of the Asian financial crisis, Mr Goh - who was Prime Minister of Singapore at the time - said he would not have done anything differently as Singapore did the right thing at that point of time.

Reflecting on the period, he said the main worry 10 years ago was whether the crisis would engulf Singapore or instil a sense of confidence in people.

Mr Goh said: "Once we have taken note of the whole situation, knowing that internally, our economy is strong, we were not too worried. We knew that we could survive.

"So, the most difficult thing was to give confidence to Singaporeans that we can survive the crisis. That’s where the cost-cutting measures amounting to some S$10 billion was a very important move on our part. It’s to restore confidence not just amongst investors, but amongst Singaporeans that we could withstand the crisis."

Mr Goh added that one of the big lessons was the need to have a strong financial sector.

He said: "We realized very much earlier that the financial industry is a global industry and therefore, you’ve got to be more aware of what’s happening in the world and in the region, in particular.

"So you’ve got to set up, not just internally but also externally, a system of regional surveillance of the financial performances of banks outside Singapore too. In other words, it requires cooperation from other countries as well."

He is also confident that an Asian financial crisis will not happen again since within Asia, banks have become much more transparent, with the regulatory authorities having become much more aware of the importance of transparency and good corporate governance.

There are also regular meetings, revealed Mr Goh, to ensure that if something does happen, others will be alerted and together action can be taken, such as the Chiangmai Initiative where countries met and agreed to have currency swaps between them, with a certain amount of their reserves set aside for this purpose.

Turning to domestic issues such as Singapore's rising costs, the Senior Minister said costs are always a factor and the government does worry about it.

"We do monitor inflation. Costs - we do worry. But that means you’ve got to move into higher value-added industries, like biomedical services and financial services, education, health and so on," said the Senior Minister.

"We cannot be doing things which we were doing before 1997, where China and India will become much more competitive. So, costs are always important, but we are not going to allow costs to prevent us from growing. Just move into the right sector," he added.

Mr Goh said that his concerns for Singapore now are on the next lap for the country and not centered on the active property market.

He said: "The prices are at the higher end. We watch very closely. Prices for the middle-income and for the HDB heart-landers - prices there are still quite affordable for Singaporeans in general.

"So, my worry will be where do we go from here? It’s a longer-term worry. It’s not a short-term worry. It comes back to my point about talent. For Singapore to grow, you need talent, talent from Singaporeans or within Singapore and talent from outside."

The Senior Minister went on to say that though Singapore is a small country and there are always other economic competitors globally, time will hopefully develop in Singapore a confidence that it can survive, whatever the problems that may come.

July 6, 2007

Rising costs not deterring MNCs from Singapore, says SM Goh

RISING costs have not deterred global corporations from setting up shop in Singapore but the Government will keep a close watch on inflation nonetheless, said Senior Minister Goh Chok Tong.

While rentals have risen amid a property boom, housing prices remain affordable for most Singaporeans, he added, in a recent television interview with CNBC.

'Costs are always important but we are not going to allow costs to prevent us from growing,' said Mr Goh. 'You do want the standard of living of Singaporeans to go up and a higher standard of living means more income in real terms.'

The way forward for Singapore, he said, is to move into higher value-added industries, such as biomedical, education and health care.

In the face of competition from China and India, Singapore cannot continue with the low-value, labour-intensive manufacturing that it relied on to drive growth before the 1997 financial crisis.

In any case, multinational companies have not shied away from Singapore because of costs although they have complained about it, Mr Goh added.

In fact, international financial institutions, particularly those in wealth management and hedge funds, have been opening regional head offices in Singapore.

On fears that a property bubble might be forming, Mr Goh said the Government is watching the situation closely but is currently not too worried about rising property prices, which are at 'the higher end'.

'Prices for the middle-income (group) and for the HDB heartlanders are still quite affordable...in general.'

'My worry will be: Where do we go from here? It's a longer-term worry,' said Mr Goh.

Read the full report in Saturday's edition of The Straits Times.

Published July 7, 2007

It's talent, not property, that is SM's real worry

By CHUANG PECK MING


(SINGAPORE) The so-called property bubble is a short-term phenomenon - and the government is not too worried about the recent spike in the price of real estate. Nor is it overly concerned about rising costs, as that only reflects a higher standard of living and more income in real terms, according to Senior Minister Goh Chok Tong.

Instead, what Mr Goh frets about is how Singapore's talent pool will grow in the longer term, he told CNBC in an interview broadcast yesterday morning.

'It's a longer-term worry. It's not a short-term worry,' he said. 'For Singapore to grow, you need talent, talent from Singaporeans or within Singapore and talent from outside.'

While the property market is currently 'active', he said the prices are rising more at the higher end. 'Prices for the middle income and for the HDB heartlanders - prices there are still quite affordable for Singaporeans in general.'

Mr Goh said costs are always a factor but, generally, the government wants the standard of living to rise. 'And a higher standard of living means more income in real terms, in the real sense.'

To compete in a high-cost environment, he said Singapore would have to move into higher value-added industries like biomedical services and financial services, education and health. 'We cannot be doing things which we were doing before 1997, where China and India will become much more competitive.' While costs will always be important, Mr Goh said the government is not going to let them stop Singapore growing. '(We) just move into the right sector,' he said.

The interview was part of a CNBC special programme to mark the 10th anniversary of the Asian financial crisis. Recalling that dark event in Asia's recent history, Mr Goh said the main worry then was whether the crisis would engulf Singapore or instil a sense of confidence in Singaporeans.

'Once we have taken note of the whole situation, knowing that internally, our economy is strong, we were not too worried. We knew that we could survive.

'So, the most difficult thing was to give confidence to Singaporeans that we can survive the crisis. That's where the cost cutting measures amounting to some $10 billion was a very important move on our part. It's to restore confidence not just among investors, but among Singaporeans that we could withstand the crisis.'

And one big lesson learnt was the need for a strong financial sector. 'We realised very much earlier that the financial industry is a global industry and therefore, you've got to be more aware of what's happening in the world and in the region, in particular . . . In other words, it requires cooperation from other countries as well.'

Weekend, July 7, 2007

Property? I have a bigger worry

SM Goh is losing no sleep over surge in price

Christie Loh
[email protected]


SINGAPOREANS are uneasy and foreigners are fretting. But their concerns about the frothy property market may be unfounded for now, according to the Republic's Senior Minister.

Mr Goh Chok Tong, who as then-Prime Minister presided over the cooling of the 1996 property fever, is losing no sleep over the current surge in prices.

"Property bubble is short-term. I think the property market is active, but at this stage, we are not too worried. The prices are at the higher end. We (are watching) very closely," Mr Goh said in an interview with CNBC telecast on Friday morning, which discussed the 1997 Asian financial crisis.

He was responding to a question on what his biggest domestic worry was, and whether it had to do with a property bubble that seemed to be forming.

"Prices for the middle-income and for the HDB heartlanders … are still quite affordable for Singaporeans in general," he said, adding that his bigger, long-term worry for the city-state was its talent pool, which is essential to economic growth.

Although tales of fear-driven home-buying and sky-high asking prices continue to make the headlines — leading the Urban Redevelopment Authority to issue two cautions in the past week against over-hyping the market, and to stress the upcoming supply of sites for residential and office space — Mr Goh's view on the real estate market is shared by pundits.

Jones Lang Lasalle research head Chua Yang Liang, for one, noted there had been no widespread speculative buying across all segments of the market.

Colliers International's research director Tay Huey Ying said: "It's only when there's not enough information or people buying for speculative purposes that there's artificial demand, which will then raise prices artificially to perhaps a level that is not supported by economic fundamentals."

Last month, National Development Minister Mah Bow Tan had said he was "comfortable" with the broader property market's pricing, and that Singaporeans ought not to panic.

Mr Goh said he has heard multinational companies complain about climbing rentals, but that has not deterred them from opening offices here.

"Costs are always important, but we are not going to allow costs to prevent us from growing. Just move into the right sector," he said, listing higher value-added industries such as biomedical and financial services.

As for concerns about the rising costs of living, he said: "Costs are always a factor, but generally, you do want the standard of living of Singaporeans to go up. And a higher standard of living means more income in real terms ... We do monitor inflation."

The Senior Minister's bigger concern: The future. "Where do we go from here? It's a longer-term worry. For Singapore to grow, you need talent, talent from Singaporeans or within Singapore and talent from outside," he said.

During the interview, Mr Goh also reflected on the 1997 crisis and how Singapore emerged from it with lessons learnt, one of which was the need for a strong financial sector. He also reiterated his confidence that another such crisis would not happen again in Asia.