SINGAPORE - Governments must drive inclusive and sustainable growth in response to the uncertainty and deep structural challenges that are faced today, said Finance Minister Lawrence Wong on Monday (April 18).
This means repurposing fiscal policy and the role of the state towards building longer-term capacity and public goods, which can include infrastructure such as healthcare and education.
It also requires fostering a refreshed common agenda between the public and private sectors beyond specific projects, in areas such as research and development (R&D) and lifelong learning, he added.
Externally, it also calls for a reinvigorating of the international order such that it is open and based on rules, with a stronger commitment to multilateral solutions.
Mr Wong was speaking at the Peterson Institute for International Economics, an independent research organisation, as part of a trip to Washington DC and New York City to meet members of the United States administration and attend the World Bank-IMF Spring Meetings, among other engagements.
It is Mr Wong's first public speech since he was announced as the leader of the ruling PAP's fourth-generation (4G) team last week, a move that paves the way for him to be Singapore's next prime minister.
In a keynote address, he touched on the difficulties faced by economies and the possible response to them.
"Economies everywhere have still not fully recovered from the lingering effects of Covid-19, especially in restoring supply chains," he said.
"We now face another major challenge, precipitated by the war in Ukraine. We are not out of the frying pan, but already into another fire."
These issues add to the structural challenges of growth, inclusion and sustainability, he added.
Globalisation is heading into a new era of decoupling, with the possibility of a more divided world economically that mirrors a more divided world politically, he added.
Growth has also been less inclusive, Mr Wong pointed out, as technology has contributed to the shrinking of middle-class jobs in some industries and Covid-19 also hit unskilled workers disproportionately.
He added: "The consequence of these factors - weak and uneven income growth, high inequality, and weak social mobility - pose significant risks for us all. When people feel that the odds are stacked against them - when they cannot reach the top no matter how hard they try; when their children will never do better than them - social stability is affected, and things start to fall apart.