Singapore’s challenge is to avoid economic scarring: DPM Heng
Cooperation between nations must be stepped up to contain Covid-19, says DPM
As the Covid-19 pandemic continues to rage, the immediate challenge for countries, including Singapore, is to avoid economic scarring. But they must be mentally prepared for a long and uncertain battle against the virus.
Global cooperation is needed to contain Covid-19, and if the United States and China do not find a way to compete constructively, the world may be caught in a vicious circle of never-ending waves of infection, Deputy Prime Minister Heng Swee Keat said yesterday.
Speaking at the virtual 26th International Conference on the Future of Asia, better known as the Nikkei conference after its organiser, Mr Heng said the world is fighting a very agile virus.
"Whenever there is any gap in our defence, it gets through and multiplies exponentially," he said.
To prevent economic scarring, the Government last year committed close to $100 billion - or 20 per cent of its gross domestic product - in Covid-19 support across five Budgets.
Explaining the reason for this extensive support, Mr Heng said: "If companies were to be closed and workers retrenched, it will be very hard to rebuild when the situation gets better. So maintaining that capability is very important."
Singapore's economy contracted by an unprecedented 5.4 per cent last year and was set for a gradual recovery this year.
TIGHTENED VIRUS CURBS
But growth may decline in the April to June period from the previous quarter because of recently tightened virus curbs, putting at risk the full-year target of more than 6 per cent.
While the resident unemployment rate eased to 4 per cent in March, compared with the peak of 4.8 per cent last September, it remains to be seen if the figures will be affected by the tightened restrictions.
"With the emergence of new, more virulent strains, we are also seeing a resurgence in cases," Mr Heng said.
Unless global cooperation to contain the virus is stepped up, he added, there could be endless waves of infection, each resulting in potentially more virulent strains, undermining existing measures and vaccines.
This could lead to fresh lockdowns and disruptions.
But such cooperation is increasingly under pressure, owing to growing strategic competition between the US and China.
While it is not unusual for major powers to have disagreements or to compete for influence, what is important, he said, is that competition be conducted within a stable framework to defuse tensions and avoid a situation where differing interests prevent cooperation even on common interests - or worse, escalate into armed conflict.
He expressed optimism that Asian nations can emerge stronger from the crisis by investing in one another, strengthening regional architecture and partnerships, and taking a constructive approach to handling hot spots in the region.