International Companies' Operations in Singapore

Mdm Speaker, companies may choose to exit or downsize their operations in Singapore for various reasons. At the firm level, companies may restructure and consolidate their global operations as a result of changes in company strategy, business model or finances. Companies are also affected by the macroeconomic environment – for instance, companies in export-oriented and cyclical industries, such as the electronics sector, may decide to downsize during the industry down-cycle. At the industry level, the profile of companies will change as our clusters move up the value chain and undertake more complex, value-adding and innovation-driven activities from Singapore. Such economic and industry transformation has been a continual process in Singapore's economic history. MTI does not find it very meaningful to specifically track a single factor such as the number of foreign companies that have exited or decided to scale down their operations here.

MTI's key focus is to ensure that Singapore's business environment remains globally competitive, and that we continue to attract and anchor the right investments and economic activities into Singapore. We are mindful that significant changes in our domestic business environment, such as the foreign worker policy, can impact companies and businesses adversely, and will make it more challenging for Singapore to maintain its global competitiveness. Therefore, as we continue to restructure and transform our economy amidst the current tightened manpower resource considerations, we will continue to carefully pace out and calibrate the changes to ensure that the business environment in Singapore remains attractive and globally competitive. We will

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continue our efforts to build higher value and more sophisticated manufacturing and services clusters to ensure our economy provides good jobs for our people and is diverse and resilient.

Mdm Speaker, I thank the Minister for the reply. It worries me that MTI does not find it meaningful to track the number of industries or companies, foreign or otherwise, that are moving out. We have to be cognisant that there is a whole eco-system – whether MNCs or SMEs – that creates the virtual cycle of job creation. If we have SMEs and MNCs starting to move out, this virtual cycle can become a vicious cycle of job losses. My question is, how can we talk about improving productivity if all our big customers are moving out of Singapore. If we are indeed proactive, then may I ask the Minister what other forward-looking measures would the MTI take to attract these high-end industries that we want to attract here to ensure that globally we are still ahead of our game?

Mdm Speaker, I apologise if the Member mistook what I said. I said that MTI does not find it meaningful to track a single number, comprising companies that move out or exited, as that was her question. As I mentioned just now in the reply to Mr Seah Kian Peng, we continue to have broad environmental scanning to know what is the situation, both forward-looking as well as anecdotal evidence. More importantly, we track by sectors because the conditions in each sector differ. Companies may be restructuring or moving up the value chain. We do track this. We also have broad economic numbers like the number of companies that are coming in and the number of companies that are going out. But as Members can well imagine, such macro numbers are also not very meaningful because it forms a very broad number. If we are looking at these numbers, then the number of foreign companies that have come to Singapore is much larger than the number exiting. That does not give us very much comfort because we need to go down several levels deeper. We also track, together with MOM, retrenchment figures which give us an idea of which companies are exiting and closing down and, therefore, workers have to be retrenched.

We do this general awareness monitoring but the Member asked for a specific number of what companies are coming in or exiting, and which companies are downsizing. There are too many noises in those changes. So, we prefer to do so sectorally, and every sectoral division in EDB, IE Singapore, SPRING and MTI have a good awareness of what are the changes happening in that sector.

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