The second ESS webinar expands on the current situation of New Normal in Singapore under the Covid-19 pandemic which was discussed in the previous webinar. It received overwhelming attendance and many of the previous discussions are broadened.
The webinar was held on 27th August 2020 and opened with Professor Euston QUAH (NTU), President of ESS, thanking all for their participation and interest. It was chaired by Professor David Lee (SUSS), Vice-president of ESS and the distinguished panellists are:
- Danny QUAH, Li Ka Shing Professor in Economics and Dean, Lee Kuan Yew School of Public Policy (NUS)
- Guiying Laura WU, Associate Professor in Economics, School of Social Sciences, NTU
- Paul SCHULTE, Founder, Schulte Research
Professor Danny Quah began the webinar using an apt analogy from the iconic scene in Bruce Lee’s movie Enter the Dragon. Before Bruce’s fight with his opponent, the opponent taunts Bruce by punching a wooden board to pieces. Bruce responds by saying “Boards don’t hit back”. Indeed, we cannot treat the current pandemic as a static crisis. Our strategies need to evolve as the situation changes around the world, as Singapore is very reliant on her trading partners.
Consequently, his second point stressed that pain is inevitable. Since Singapore’s trade is nearly 400% of her GDP pre-pandemic, we expect Creative Destruction while the rest of the world reels from recovery, a sentiment which other panellists concurred.
His third point is that we need to “save the worker, not the job”. Singapore’s recovery policies will entail sustaining Aggregate Demand (AD) and Aggregate Supply (AS) so that we can ride the winds when market picks up again. This is what the government is already doing; to give Singapore the “oomph” when economy picks up again with our trading partners.
He concluded by emphasising the importance of reskilling and retraining. Since all business models where people come into physical contact will have to be minimised, E-commerce and digitisation, which has been happening even before the pandemic, will be hastened.
“We have to accept the pain and refocus. We have to let those who don’t adapt, go,” he noted, giving pertinent advice as live polls from the webinar showed a large group of participants are students.
Agreeing with Prof Danny Quah’s stance, Prof Laura Wu is also cautiously optimistic. Citing data from her academic study, Prof Wu took a closer look at the Singapore and global situation, as well as examined how Singapore fared in tackling the pandemic. Barring the handling of cases in foreign worker dormitories, the government has otherwise managed relatively well when compared in cross-country data. Live polls from webinar participants also agree, with the majority saying the government has done well.
Particularly in community spread containment (ranked 17 out of 89 countries) and reducing number of deaths (ranked 14 out of 93 countries), Singapore fared excellently. Thus, even if Ministry of Trade and Industry (MTI) puts Singapore year-on-year GDP growth forecast to be around -5 to -7%, she believes recovery will be robust once it comes.
She further commended Singapore’s stimulus packages. It stands at around 20% of Singapore’s 2020 GDP as of August 2020, which is a lot higher than the global average of ~9% in developed nations. Due to our prudent approach during growth years, we can have the deep pockets for such a rainy day without our government resorting to any borrowing. Even if the long term effects are too early to be seen, it certainly alleviated a lot of the sudden economic shock brought about by Covid-19.
Prof Wu conjectured that Singapore’s recovery will be K-shaped, with those that can adapt moving upwards (like the upper arm of K) as they navigate the changes, and those who are unable to adapt spiralling further downwards (the lower arm of K).
The government should therefore focus on this bottom arm of the K: to help those needy individuals and businesses transit or ease their exit, to minimise the divide. For example, Singapore Airlines (SIA) and the hotel industry are on the bottom of the K; how we help them survive through this is important.
“I’m more optimistic than Professor Danny Quah,” She commented in jest. “What he calls Creative Destruction, I call it Structural Transformation.”
On this point of transforming our economies, Paul Schulte remarked that smart countries like Singapore should “circle the wagon and band together”.
He believes that MNCs who have been reaping the profits when the economy was on the upbeat should now shell out some contributions. They cannot and should not sit idly by; the government should start talking to these corporations for collaborated help. Examples he cited include Google, Qualcomm, and Disney.
Education and certification’s business model should also adapt, as he cited the famous Stanford Model to reinvent certification and education under the pandemic.
He paid particular emphasis to how Singapore should position her economy, seeing that the overall economic pie is smaller under the pandemic and every other major city will be trying to take business away from Singapore. We should therefore answer the competition by marketing our comparative advantage as a hub, which the government is already doing.
Innovation will play an important role for Singapore moving forward. Citing some examples such as the Google Milestone Prize and the Defence Advanced Research Projects Agency (DARPA) Pentagon prize, Mr. Schelte highly encourages the government to collaborate with MNCs to incentivise people to innovate.
Answering to a question from about how concern we should be about the bottom arm of the K-shaped recovery, Paul accentuates the notion of giving resources where people really need it. The bottom part of the K is important and if people are unhappy, it might cause unrest and dissatisfaction which can disrupt social fabric. Therefore we need to maintain a stable society so that our economy can recover seamlessly, and more care should be given to the people in the bottom arm trajectory.
“If society falls apart in violence, it will take 20-30 years to recover, and hard efforts are wiped out!” He answered.
When asked about what happens should a vaccine be found, all panellists are in accord that our current problems would not just go away. Technically speaking, Covid-19 is but a strain of a larger family of coronavirus. Should a mutation occur in any of virus genomes, which is already proven evident, our vaccines’ effectiveness could be neutered. Hence, the more feasible outcome is that our economies will change, fuelled by this necessity.
Much akin to “flattening the curve” virulent-wise, we hope the insights gain from the fruitful discussions throughout this webinar can help all to smoothen their shock and recovery journey. The sentiments shared should lift our outlook, and we must maintain our positivity that recovery will eventually come, as with all crises. (By Jackson Teh-NTU)