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Disruption, not anti-trade, should be S'pore's main concern: StanChart

Singapore

FORGET anti-globalisation. What Singapore should really keep its eyes on is the coming of the Fourth Industrial Revolution, Standard Chartered economists have said.

And with the city-state engaged in plans to redraw its economic future, how well it emerges from these technological challenges can be a useful model for other larger economies to learn from, the economists added in comments during a media briefing on the bank's global outlook for 2017, held at its office here.

"Which matters more as a challenge at the moment?" said David Mann, Asia chief economist, in response to queries about Singapore's outlook amid brightening prospects elsewhere.

"I think technological change - and the ability or willingness to recognise it and adjust to it quickly - is a more important factor."

Their comments come as fears of protectionism are on the rise. Donald Trump, who ran on an anti-trade platform during his campaign for US presidency, will be inaugurated next week.

Already, the Singapore government is casting a wary eye on these developments, saying that the pushback against trade will affect the country's economy in 2017.

Amid all these, Singapore is expected to issue a seminal Committee on the Future Economy (CFE) report later this month which will outline what challenges its economy faces, and how it can tackle them.

The Standard Chartered economists urged on Monday that Singapore's attention should not waver from technological disruption - which is already making its effects felt throughout the economy.

"If we are the first country to go ahead with the world's first driverless transport system, how are we going to manage the potential unemployment in the domestic transport sector?" mused Edward Lee, head of Asean economic research.

These disruptive technologies are sometimes seen as a key feature of the Fourth Industrial Revolution, which describes how rapid technological advances are starting to blur the lines between the physical, digital, and biological spheres.

The World Economic Forum had centred its theme for its 2016 annual meeting on this topic, and its founder and executive chairman, Klaus Schwab, is a major proponent of it.

He describes how mobile connectivity has linked billions of people to shared pools of knowledge that can be harnessed by other emerging technologies such as artificial intelligence, robotics, autonomous vehicles and 3D printing.

Singapore has already started to embrace some of these technologies. Government agencies have encouraged sectors to develop and adopt new technologies such as robotics, 3D printing and prefabrication.

But with Mr Trump due to inaugurate on Jan 20, anti-globalisation is likely to remain a key worry for 2017.

Mr Mann sought to allay some fears, saying that all is not lost. Among those who are anti-globalisation, one can still find those who support free trade, perhaps to encourage closer relations, he said.

For example, Mr Trump, though having rubbished the idea of mega trade pact Trans-Pacific Partnership, has said that he will "negotiate fair, bilateral trade deals" for jobs creation in the US during his first 100 days in office.

But beyond the rise of Mr Trump, signs were already afoot that global trade has been weakening.

Global trade growth has been slower than global growth, noted Mr Lee. Singapore's exports to major trading partners has also fallen when compared to their economic growth. This may also suggest that competitiveness of the city-state's exports is falling.

Therefore, the CFE report is a good chance for Singapore to be clear about what its real challenges are, the economists said. With it, Singapore can reposition its economy so that it can tackle these challenges, while reaping benefits from them.

And its efforts can have an exemplary effect on other economies on how they can deal with disruptions, said Mr Mann.

"A small city-state is in a stronger position to adjust than some of the other larger economies; there's reason to be positive about some of these changes," he said.