Small and medium-sized enterprises (SMEs) will need the right business ecosystem to thrive, but land and financing constraints hamper the private sector’s growth in Singapore, said Manu Bhaskaran, CEO of the Singapore-based research firm Centennial Asia Advisors.
Mr Bhaskaran was among the panellists in the webinar titled, “The Future and Challenges to the Singapore Economy”, organised by the Future of Singapore (FOSG) via Zoom on 17 Apr.
The webinar touched on the fractured global economy with Singapore caught between the US and China blocs, disruptive technological revolutions to jobs and global supply chains in artificial intelligence (AI), the internet of things, 3D printing as well as future pandemics.
Citing the points made by fellow panellists – Progress Singapore Party’s (PSP) NCMP Leong Mun Wai and Workers’ Party’s (WP) member Yee Jenn Jong – that the Government should provide “enough leeway” to private enterprises as the companies would better understand the market, Mr Bhaskaran said such “free market” would only work with “the right conditions” in place.
“The thing about being flexible in an economy is that people with the right ideas should get access to land, labour and capital. In Singapore, if the land is 85 per cent owned by the Government and they have these very strict zoning laws, it really takes away a lot of flexibility,” he noted.
“Now if you have an SME with a bright idea or something, but he needs land and he applies to the SLA for that land. Will he get it or will there be a bureaucratic decision made like, ‘this SME really not in the right kind of high-value area that we are trying to address and we will deny the SME that piece of land,’ so this is a real impediment,” he explained.
In terms of financing, Mr Bhaskaran compared Singapore to Germany, saying that Germany has a financial institution that helps to fund the country’s SMEs, while Singapore has no financing ecosystem.
“If you want SMEs to thrive, you have to create a fair level playing field. In many other countries, they have strict laws to make sure that large companies cannot bully, or intimidate, or do unfair things to small companies.
“I think we should have more protections of the small against the big and I think we don’t have enough of that,” he noted.
Mr Bhaskaran also highlighted the need to have an agency like the Export-Import (EXIM) Bank, which supports importers and exporters of the country, given that most of the competitors may be equipped with such assistance in their country.
“But because for some reason we have this very purest notion that EXIM banks are not very market-friendly and all that we shouldn’t do these things, I think our guys lose out and I think we need to get these things right if we are to make any progress.
Mr Bhaskaran went on to say that the Singapore Government has gone “overboard” on bringing in “lower-skilled” migrant workers.
“Now, they realized the mistake and they’re becoming ultra-tight and very rigid in the way they allow foreign workers in.
“So again, ultimately the margin supply of labour comes from the Government’s decisions, and that doesn’t make for an ecosystem where you can get this kind of flexibility, and I think that’s what we really need to go tackle,” he said.