S'pore to double manufacturing output

S'pore to double manufacturing output

Associated Press, Singapore

Singapore says it hopes to double manufacturing output in 15 years even as regional competition heats up from lower-cost rivals such as fast-growing China and India.

Manufacturing plays a significant part in Singapore's economy, accounting for about a quarter of gross domestic product - equivalent last year to about S$40 billion (US$23.5 billion; euro 19 billion).

"The Economic Development Board is quite confident that in 15 years we can double our manufacturing output," Prime Minister Lee Hsien Loong said late Sunday in his first major policy speech since he was sworn in as leader Aug. 12.

Suan Teck Kin, an economist at Overseas-Chinese Banking Corp., said Monday Singapore would be able to meet the target as long as the pace of overall growth keeps up.

"I think it's realistic because, I think, going forward the main driver is going to be the pharmaceuticals and the biomed," he said, referring to the government's efforts to cultivate a fledgling biomedical industry.

Manufacturing, which is dominated by high-tech products, accounts for one job in five in Singapore.

Lee said by concentrating on attracting so-called higher-end work - which uses larger amounts of capital relative to labor - the manufacturing sector could continue to grow.

Some observers, however, have suggested that Singapore is already struggling to retain its manufacturing base as multinationals opt to set up operations in lower-cost countries, especially China.

In reply officials have said Singapore should aim to balance its admittedly higher costs with the country's greater efficiency, stability and superior infrastructure.

Singapore's administration has also argued that it is important to keep a manufacturing capability to support the tiny country's defense needs.

In his three-hour address, Lee painted a positive picture of the economic outlook, saying although continued restructuring would mean some job losses, newer positions would be created.

After several revisions, the government expects growth of 8 percent to 9 percent this year, the best showing in four years.