STATEMENT BY MR TIMOTHY CHARLES YAP, DELEGATE TO THE 71ST SESSION OF THE UNITED NATIONS GENERAL ASSEMBLY ON AGENDA ITEM 17, ON MACROECONOMIC POLICY QUESTIONS, SECOND COMMITTEE, 20 OCTOBER 2016

Thank you, Mr Chairman.

1              Singapore aligns itself with the statements made by Thailand on behalf of the Group of 77 and China; the Maldives on behalf of the Alliance of Small Island States (AOSIS); and Malaysia on behalf of the Association of Southeast Asian Nations (ASEAN).  I would also like to thank the Secretary-General for the various reports on this agenda item.

Mr Chairman,

2              Singapore strongly supports the sustained, inclusive and sustainable growth envisioned by the 2030 Agenda for Sustainable Development.  The ultimate objective of macroeconomic policy is not growth in and of itself, but growth to improve peoples’ lives.

3              However, the extremely difficult and volatile global economic environment poses both a short-term challenge to domestic priorities such as jobs and growth, as well as a longer-term threat to achieving the 2030 Agenda and its Sustainable Development Goals.

4              How to ride out these challenges and emerge with solid fundamentals for sustained, inclusive and sustainable future global growth is the core macroeconomic policy question before us today.  We all know that there are no “right” answers, but I would like to offer some perspectives from Singapore’s experience.

A Principled and Pragmatic Approach

5              Singapore takes a principled and pragmatic approach to addressing economic volatility.  Principled because this keeps us focused on the type of growth we wish to see.  Pragmatic because our policies draw on many different intellectual, ideological, and political traditions depending on the circumstances.  Ultimately, we adopt policies that work.  This is why we have a currency that floats freely, but within a defined band: it allows us to marry the efficiency of free markets with the price stability to support growth and trade, while also helping to manage domestic interest rates and inflation.  Not everyone may agree with this approach, but for us, it is the best solution that is tailored to meet our circumstances.

Engagement is Essential

Mr Chairman,

6              Good policies will not sell themselves.  While many of us have spoken about the benefits of trade, the International Monetary Fund’s (IMF) recent World Economic Outlook indicated that political discord and a fraying consensus on the gains from trade are an increasing risk to global economic recovery.  Good policy does not always make good politics.

7              In this regard, engaging citizens early and often is essential.  Open-ended engagement helps to identify blind-sides, bridge ideological divides, and generate conversations on policy tradeoffs.  In recent years, Singapore has made a concerted effort to better engage our people and businesses by improving customer service interactions, and by carrying out multiple national engagement efforts such as Our Singapore Conversation in 2013, SG Future in 2015 and the ongoing Committee on the Future Economy.  These efforts help build understanding, but more importantly, help build trust.

Effective and Efficient Implementation

8              To cement trust, policy must ultimately be effectively and efficiently implemented.  This is key for governments in today’s sluggish growth environment as all countries face limited fiscal space and slow growth in government revenues, and are pressured to keep schemes targeted and administration costs low.  But these objectives are often at tension with themselves and wider policy objectives.

9              For instance, when considering how to drive productivity improvements, Singapore looked at creating a business grant targeted at funding genuine innovations.  While targeted, grant applications would practically have added a massive workload for businesses, and the public servants who assess, administer, and audit the grants.  We thus eventually decided against a grant in favour of an automatic scheme administered through tax credits and deductions, despite it being less targeted.

A Principled, Rule-Based International Environment

Mr Chairman,

10         These three factors – Principled Pragmatism, Engagement, and Effective Implementation – help Singapore to address economic challenges.

11         I would like to end by reiterating Singapore’s support for an open, transparent, principled and rules-based international environment.  This enables all states, large and small, to operate on a fair playing field even as each country chooses its own path.  International organisations such as the UN have a key role here in engendering cooperation and promoting a rules-based multilateral system.  This is especially important in macroeconomic policy, where the potential for cross-border impacts are very real.

12         In this regard, Singapore stands ready to engage actively and constructively in the discussions of the Second Committee.

13         Thank you, Mr Chairman.  

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