March 2019
« Feb    
ASEAN ASEAN (R) ASEAN-ISIS Country (R): Indonesia Country (R): Malaysia Country (R): Myanmar Country (R): Singapore Country: ASEAN Country: Australia Country: Cambodia Country: China Country: Germany Country: India Country: Indonesia Country: Japan Country: Laos Country: Malaysia Country: Myanmar Country: North Korea Country: Philippines Country: Qatar Country: Russia Country: Singapore Country: Singapore Country: South Korea Country: Taiwan Country: Thailand Country: UK Country: US Country: USA Country: Vietnam donald trump Elections: Indonesia 2019 Elections: Thailand 2019 European Union Event: SDSWR Events: AAF Focus CH: Hong Kong Focus JP: Abenomics Focus MM: Rakhine State Focus MY: GE14 Focus SG: SG Secure Focus SG: Smart Nation Focus SG: Society Focus TH: Protests Focus UK: Brexit Fukushima Global Citizens Singapore Institute: ERIA Institute: EU Centre in Singapore Institute: SIIA Leaders: Aung San Suu Kyi Leaders: Jokowi Leaders: Kim Jong Un Leaders: Lee Hsien Loong Leaders: Lee Kuan Yew Leaders: Mahathir Mohamad Leaders: Obama Leaders: Trump Malaysia government Myanmar: NLD Nicholas Fang Oh Ei Sun Org: AIIB Org: G20 Region: Africa Region: Asia Region: Latin America Region: Middle East Reports Simon Tay Topic (Environment): Peatland Topic (Environment): Smallholders Topic (R): Belt and Road Topic (R): Business Topic (R): Digitisation Topic (R): Economy Topic (R): Green Finance Topic (R): Infrastructure Topic (R): Palm Oil Topic (R): Peatland Topic (R): Smallholders Topic (R): Sustainability Topic: Anti-Globalisation Topic: Belt and Road Topic: Business Topic: Development Topic: Digitisation Topic: E-Commerce Topic: Economics Topic: Economy Topic: Elections Topic: Environment Topic: Finance Topic: Global Citizens Topic: Globalisation Topic: Green Finance Topic: Haze Topic: Human Rights Topic: Human Trafficking Topic: Indo-Pacific Topic: Infrastructure Topic: Investment Topic: Labour Topic: Nuclear Topic: Palm Oil Topic: Race Topic: Regional Integration Topic: Religion Topic: Security Topic: Singapore-Malaysia Relations Topic: Small States Topic: SMEs Topic: Sustainability Topic: Sustainable/Green Infrastructure Topic: Trade Trade: AEC Trade: CPTPP Trade: FTA Trade: FTAAP Trade: Multilateralism Trade: RCEP Trade: TPP Trade: War Trends (Digital): Cybersecurity Trends (Digital): Data privacy Trends (Digital): Data security Trends (Digital): Digital Economy Trends (Digital): Digitisation Trends (Digital): Facebook Trends (Digital): New Media Trends (Digital): Smart Cities Trends (Environment): Air pollution Trends (Environment): Climate Change Trends (Environment): Energy Trends (Environment): Green Growth Trends (Environment): Hotspots Trends (Environment): Riau Trends (Environment): RSPO Trends (Environment): Sustainability Trends (Environment): Water Trends (Globalisation): ASEAN Citizens Trends (Globalisation): Populism Trends (Globalisation): Workers Rights Trends (Security): South China Sea Trends (Security): Terrorism Trends (Social): Demographics Trends (Social): Diversity United States WTO

3-on-3 with Manu Bhaskaran: Low commodity prices – curse or blessing

24 Feb 3-on-3 with Manu Bhaskaran: Low commodity prices – curse or blessing

Mr Manu Bhaskaran is the founding CEO of the Centennial Group’s Singapore subsidiary, Centennial Asia Advisors, and a Council Member of the SIIA. He is also an Adjunct Senior Research Fellow at the Lee Kuan Yew School of Public Policy.

We asked him for his views on recent economic headlines – labour productivity in Singapore, and the impact of low commodity prices on our region.

Q1: Are there weaknesses in the local labour market preventing Singaporean employees from being more productive?

Mr Bhaskaran: I think we’ve had a long period where we allowed in a very large number, maybe a disproportionate number of foreign workers, at the lower end of the skill category. I think it’s fair to say that this probably helped to keep the wages at the lower end of the skill spectrum much lower than they would have been. The fact of the matter is that companies respond to incentives. If wages are low, there’s less incentive to move up the value chain. It’s moving up the value chain that delivers productivity growth. And the incentive structure was wrong, that’s what I think was wrong with the labour market: the excessive inflow of cheap foreign labour.

Q2: We’re nearing the end of a commodity supercycle. What sort of implications will this have on ASEAN economies, in particular economies that export commodities like Malaysia and Indonesia?

Mr Bhaskaran: Well, I’m not sure if we are ending the cycle or not but I personally don’t see lower commodity prices as necessarily negative for the way we interact with the region. Malaysia is very important to us. Malaysia exports much more in terms of non-commodity exports than commodity exports. We benefit from that because we have supply chains and services that are geared to benefiting from manufacturing and other activities in Malaysia, but less so the commodity activities in Malaysia. Similarly in Indonesia, while a fall in base metal prices and so on will hurt Indonesia, I think it will spur Indonesia to consider moving back into what it used to be very good at, which was export-oriented manufacturing, which has been neglected for 14-15 years. And I think that will happen under the new administration. And that pattern of growth in Indonesia will be extraordinarily positive for Singapore compared to a purely commodity-driven growth, which is not sustainable anyway.