In a 20-min speech to French representatives at the Singapore-France Economic Forum, Singapore Deputy Prime Minister (DPM) Tharman Shanmugaratnam lectured the France delegates on economy and governance.
DPM Tharman warned that countries should continue to keep an open economy and welcome globalisation, and should not yield in to local demands to protect jobs and industries:
“Nations should keep economies open, but do more to help those who lose out.
Domestic policies are the real differentiator in the level of success that countries have in dealing with the effects of open economies and technological changes. The temptation to close the door to protect industries and jobs in an attempt to help those who have lost out from globalisation, would leave more at the losing end. Instead, countries should continue to keep their economies open and at the same time implement policies so that globalisation and inclusive societies can co-exist rather than be at odds with each other.
The only positive strategy forward is to stay open, find ways in which we can have increased co-operative internationalisation, but do far more to help those who lose out. That requires active public policies, it requires new public-private partnerships and it requires a new political culture that’s about everyone being on the same boat and that’s about inclusivity not just in economic terms but in social terms.”
After this opening, DPM Tharman started lecturing about “3 areas of public policy”, including wealth redistribution – not knowing France have only a gini coefficient of 0.33 while Singapore have one of the highest income gap in the world at a gini coefficient of 0.464:
“While focusing on redistribution to ensure those who lose out do not fall into a deep ditch, policymakers should also place greater emphasis on regenerating cities and industries to create jobs amid technological disruption and changes. Second, there is a need to increase the penetration of innovation, especially among smaller firms, as this is a way to address inequalities and to achieve greater cohesion in societies. On the one hand, you know there are remarkable innovations taking place, all around the advanced world … But the spread of new technologies, ideas and business practices to the rest of the industry has been very slow … for reasons not well understood. So the gap between the frontier and the rest of the economy has widened.”
DPM Tharman however deflected the blame of rising inequality to government policies and instead quoted unsubstantiated “studies” that the inequality is a result of “widening levels and rates of growth productivity between businesses”:
“Many studies have shown that the widening of levels and rates of growth productivity between firms is responsible for much of the inequality around the world.”