Driving a Strong and Inclusive Post-Pandemic Recovery through the Partnership for Growth and Innovation
By: U.S. Secretary of Commerce Gina Raimondo and Singapore Minister for Trade and Industry Gan Kim Yong
The United States and Singapore celebrate 55 years of diplomatic relations this year. We share a robust and long-standing economic partnership that has been built up over half a century. The United States is Singapore’s largest source of foreign direct investment, with an investment stock of over USD 270 billion, or about one third of the United States’ total investments in the Indo-Pacific. In turn, Singapore is the second largest Asian source of investment in the U.S. market, and supports over a quarter million American jobs through its investments in and imports from the United States.
Building on our strong ties, the United States and Singapore have launched a strategic pathfinder for new ways to deepen economic integration between the United States and Southeast Asia. Dubbed the Partnership for Growth and Innovation (PGI), this is the first new economic initiative between the United States and a country in Asia under the Biden-Harris Administration. It underscores the strong interest of U.S. companies in Singapore and Southeast Asia as key nodes in global supply chains and in growing markets with significant business opportunities.
We are excited by the prospects of this partnership to secure mutually beneficial outcomes and its potential to pave the way for larger regional approaches, just as the U.S.-Singapore Free Trade Agreement was the first FTA that the United States signed with a country in Southeast and East Asia. Wherever possible, we will welcome businesses and governments from the broader Southeast Asia region to participate in PGI activities, so that we build back better and emerge stronger together.
At its heart, the PGI is intended to support our workers and businesses, and secure inclusive growth for our economies and regions by strengthening trade and investment collaboration in new and forward-looking areas. We will start with four pillars that pose profound challenges and opportunities to societies, while also demonstrating strong potential for job creation and growth: digital economy, energy and environmental technology, advanced manufacturing, and healthcare.
Take the digital economy pillar, for example. The pandemic has dramatically accelerated digital adoption by consumers and businesses, and has led to a proliferation of digital products and services. In Southeast Asia alone, the digital economy is forecast to more than triple from USD 100 billion in 2020 to over USD 360 billion by 2025. At the same time, we must guard against digital divides and ensure that no one is left behind, especially lower-skilled labour which is at greater risk of displacement by automation. Our governments are working closely with industry partners to accelerate the creation of good jobs while investing in upskilling our workers through traineeships and other programs. But we believe that we can go further through international cooperation.
For instance, we can help our small businesses access new markets and digital solutions by collaborating on common technical requirements and interoperable systems, such as e-invoicing, e-payments and mechanisms that build interoperability between different data protection and privacy regimes and facilitate cross border data flows, such as the APEC Cross Border Privacy Rules System. This will allow them to reach new customers and suppliers more easily than ever and at a fraction of the costs than they had to incur previously. Our workers can also look forward to new opportunities and better wages as their productivity rises, especially as we encourage organizations to redesign their roles and provide training to empower them to increase the value of their work.1 Studies suggest that on average, workers in the digital economy earn better wages than workers in other parts of the economy.2
It is undeniable that jobs and industries that participate in the digital economy will be the jobs and industries of the future. It is essential for our shared, long-term growth that we create opportunities for everyone—men and women, businesses large and small—to have a chance to participate in the digital economy.
The digital economy is just one of four PGI pillars which hold significant promise for mutually beneficial growth and job creation for our economies. For each of these pillars, we have set out a work plan to elevate policy discussions on standards and other cross-cutting issues. We will also harness the creative energies and capabilities of our private sectors, by promoting commercial linkages and exploring public-private partnerships.
We will pursue more collaborations under the PGI in the coming years; our goal is to also deliver commercially meaningful outcomes in priority sectors such as clean energy and climate change solutions, advanced manufacturing technologies, and medical technologies.
The world is at a critical juncture today, almost two years into the COVID-19 pandemic. While the IMF expects global GDP to grow by around 6 percent in 2021,3 our road to economic recovery has been bumpy amidst recurring waves of COVID-19. The aggregated growth figures also mask a fragile and uneven recovery, especially for workers and small businesses. Many countries are still working to raise their vaccination rates; some are experiencing severe and persistent economic contractions. This can lead to different growth trajectories, worsening the growing inequality around the world, and making worse the situation of the poor and vulnerable.
Countries around the world are faced with two choices. One is to recoil and retreat into protectionism and erect barriers, turning away from one another. Another is to purposefully build back better and emerge stronger together, recognizing that countries are interdependent and that one cannot truly be safe and prosper unless our neighbors and the rest of the world are also doing well. By working together, we can pool our greatest strengths and leverage our complementarities to address the opportunities and challenges of the future global economy.
The United States and Singapore have made a clear choice. To drive a strong and inclusive post-pandemic recovery, we are committed to work together and grow the pie for all. As Economic Ministers for our respective countries, we are making a strong stand today in support of global and regional cooperation, and upholding the open and rules-based order.
We believe that supply lines should be kept open and connected, and made more resilient, through working with trusted partners. We call on like-minded partners to work with us in combatting the pandemic and collaborating in new growth areas. By establishing partnerships for growth and innovation, we support our workers and businesses, and secure inclusive growth for our economies and regions.
This article was first published:
https://www.straitstimes.com/opinion/spore-us-ties-a-new-partnership-for-growth-and-innovation