As Singapore’s population ages, can the Lion City continue to roar?

29 March 2018

Last month Singapore’s Finance Minister Heng Swee Keat announced a significant rise in goods and services tax (GST) that will be implemented from 2021. This plan of action will help to finance the country’s education, security, infrastructure and health care development. While there have been negative responses to the announcement, the economists believe that increasing the tax will counteract the forthcoming negative effects of Singapore’s slowing economy, low birth rates and a rapidly ageing population. This “demographic time bomb” has already created a number of concerns for policymakers, health care providers and educators, and calls for a different and new approach to ensure that the region’s economy continues to grow in the future. Although Singapore is considered to be one of the world’s most innovative countries, the vast majority of its businesses are still using traditional models and not investing enough resources in innovation projects. This is where the tax increase comes in. The extra finances are planned to be used to help businesses go digital and increase innovation activities. This, however, is only the first step towards tackling Singapore’s ageing population challenge. Business owners and the government must also work together to ensure that the businesses and the economy continue to grow sustainably in the region.

Read the full article on the South China Morning Post website. 

Other stories in this edition of Asia Echo: