Singapore Keeps Firm Hands on Economy as New Cabinet Revealed

By Rujun Shen 29 September 2015

SINGAPORE — Singapore has named Heng Swee Keat its finance minister, replacing Tharman Shanmugaratnam, who will remain deputy prime minister and maintain an important economic role after a spate of weak indicators.

The appointments, two weeks after an election victory for the ruling People’s Action Party (PAP), suggest Prime Minister Lee Hsien Loong wants experienced hands to steer the S$390 billion (US$273 billion) economy through choppy waters.

Heng, currently education minister, was a former managing director of Singapore’s central bank and praised by Singapore’s late first prime minister, Lee Kuan Yew, for being the best principal private secretary he ever had.

Shanmugaratnam, who has worked for the International Monetary Fund, will also be the coordinating minister for economic and social policies and continues as the chairman of the Monetary Authority of Singapore, the central bank.

“The economy needs steady hands on the deck because the outlook remains challenging,” said Song Seng Wun, an economist at CIMB Private Bank.

Shanmugaratnam and Heng have the experience to roll out, if necessary, policies in response to any further slowdown or recession, he said.

Singapore’s industrial output shrank more than expected in August, the latest in a run of indicators that has prompted economists to flag the risk of a technical recession, or two straight quarters of contraction.

Lee told a news conference among the priorities were jobs and opportunities. He appointed two ministers to the Ministry of Trade and Industry, one of whom will focus on economic restructuring.

The government has slowed a rapid inflow of foreign workers, which had led to grumbling among voters, and taken up initiatives to help Singaporeans secure more managerial and professional jobs.

Lee said the new cabinet would prepare the next team of leaders to take over from him and his senior colleagues after the next general elections, due within five years.

K Shanmugam will remain minister for law and also take the home affairs portfolio. His foreign affairs portfolio will be taken by Vivian Balakrishnan, currently minister for environment and water resources.

Minister for National Development Khaw Boon Wan, who has been credited with solving a housing crunch, will take up the transport portfolio. A series of mass-transit breakdowns has become another source of complaints.

Lee and his PAP, which has ruled the city-state since its independence in 1965, won a convincing general election victory this month with 69.9 percent of the vote, its highest share since 2001.