What will it take to revive Forest City, Malaysia's US$100 billion ‘ghost town'?
But just recently, the couple made a move that would cut her commuting time by more than half and bring them together again.
They signed a lease for a three-room apartment in Forest City, the US$100 billion mega housing project at the southern tip of Johor, just across from Singapore. And Wafa was 'so excited to move'.
'Finally, I'm not going to do a long-distance relationship with my husband,' said the 27-year-old. 'He can commute daily (from) here.'
Convenience was not the only reason they seized this opportunity. They were also attracted by the rental.
'Here, I can easily get, (for) below RM2,000 (US$465) per month, … an apartment with two bathrooms, but (in) other places, maybe just a studio (at) the same price,' said Wafa. 'It's more, I'd say, affordable compared to other places.'
Forest City has a notorious reputation, however, having gained international attention in the last few years as Malaysia's ghost town.
It was once billed as a 'living paradise' — a luxurious, eco-friendly and smart city development with a mix of apartments, commercial spaces, malls and hotels.
Jointly developed by Chinese developer Country Garden and Esplanade Danga 88, a Malaysian company backed by the Johor state government and Johor's sultan, the project is linked to the Belt and Road Initiative, China's mega infrastructure and trade network.
Forest City is meant to accommodate around 700,000 people on four man-made islands by 2035, with a total land area of nearly 14 sq km — about three times the size of Sentosa — once the reclamation is complete.
But since the project launch in 2014, only one of the islands has been reclaimed, with about 20,000 people currently living there.
The project started stalling in 2017 when the Chinese government introduced capital controls on money leaving the country. This affected Chinese buyers seeking properties abroad, the primary target for Forest City's developers.
Malaysian politics also had an impact on sales when former Prime Minister Mahathir Mohamad declared that overseas buyers would not easily receive residency visas. He had initially threatened to ban foreign purchases in Forest City altogether.
Then the pandemic hit, and travel restrictions led to a significant decline in demand.
At the same time, China's property sector downturn left Country Garden battling a liquidity crisis, with total liabilities of US$164 billion at the end of 2023, including US$16.4 billion in offshore debt.
Plans are now underway to revive and transform the Forest City project.
And with a new cross-border development realised in January — when the agreement to establish the Johor-Singapore Special Economic Zone (SEZ) was signed — the question arises as to how much of a boost this will be for Forest City.
With its growing residential community, is it not even a ghost town any longer, the programme Insight also asks.
BREATHING NEW LIFE INTO THE PROJECT
The proposal to integrate Forest City into the Johor-Singapore SEZ was made last August by the Johor state government.
Extending across Iskandar Malaysia and Pengerang in Johor, the SEZ — at 3,571 sq km — is close to five times the size of Singapore and is aimed at improving trade and business ties between the two neighbouring countries.
If the SEZ succeeds, more people could be working and living in southern Johor, said Adib Zalkapli, managing director of political risk consultancy Viewfinder Global Affairs. 'So Forest City, being a ready-made township, could attract some of these people.'
And one important key to the SEZ's potential success is the financial centre that is Singapore.
'What Singapore has is advanced logistics … (and an) international trade hub,' cited Lee Ting Han, chairman of Johor's investment, trade, consumer affairs and human resources committee.
'In Johor, what we can offer is a talent pool, infrastructure, land, resources, et cetera.
'Therefore, we think that with Forest City being included … (in) the Johor-Singapore SEZ, Forest City itself may be able to complement part of the existing ecosystem within Singapore.'
Forest City's value proposition does not only lie in its housing. It was declared a duty-free zone last year to support tourism and bolster the local economy.
The Malaysian government has also designated it as a special financial zone, to breathe new life into the project by transforming it into a hub for international capital.
One plan is to turn Forest City into a destination for global family offices — companies that manage a family's wealth and investments. The goal is to attract high net-worth individuals to the island.
In Malaysia, a single-family office can be set up with a minimum of RM30 million in assets under management, which is lower than the minimum of S$20 million required in Singapore.
Noting that the Asia Pacific is one of the world's high-growth areas, PricewaterhouseCoopers Malaysia tax partner Fung Mei Lin said: 'There are a lot of wealth movements, and I don't think it's unreasonable for Malaysia to (be) trying to attract a part of that.'
To this end, Malaysia has offered a zero per cent tax rate for family offices located in Forest City, which Fung said would be 'a no-brainer' for these offices, compared to the standard corporate tax rate of 24 per cent.
This is part of a tax incentive package for the special financial zone that the government announced last September to stimulate financial services such as fintech.
And in April, two family offices got the ball rolling as the first to set up in Forest City.
COMPLICATIONS REMAIN
Things are not necessarily going to be straightforward for Forest City, however.
According to the finance ministry, 70 per cent of the properties sold have been bought by Chinese investors. The project is still largely marketed to this group, even as their appetite for investment has waned following China's property sector troubles.
While Chinese overseas investment in real estate has seen a 'slow recovery' to about US$10 billion last year, said National University of Singapore Business School dean's chair professor of real estate Qin Yu, about US$40 billion was invested in 2017 by comparison.
Can investment levels recover to the peaks in 2016 and 2017? 'Probably not,' she said.
But Danny Wong, chief executive officer of private wealth management company Areca Capital, is confident that the Chinese will 'come back'
'China's population is so huge, and internal demand itself can make them vibrant,' he said. 'What they need to do is stabilise the whole situation. … It's just a matter of time.'
Having lost as much as 97 per cent of its market value from its peak in 2018, however, it is unclear whether Country Garden can continue to develop Forest City. The company, which is still mired in debt, declined comment.
'It might be challenging for (Country Garden),' said Qin, 'because (it) even has trouble … finishing some of the projects within mainland China.'
Last November, Country Garden said its Malaysian projects were 'operating normally'. The developer is now in talks with creditors to restructure its offshore debt to avoid liquidation. But should it fail, who will complete the Forest City project?
Johor's government, for one, is 'not in that position at the moment', said Lee. 'The government isn't directly involved in the project itself, so we don't have any equity participation.'
Nor should there be a government bailout because of the scale of the project, said economist Geoffrey Williams, the founder and director of Williams Business Consultancy.
'The best way for the government to support (it) is to provide a deregulated, liberal environment where people can get access to the licence to operate,' he said.
'Nobody in Malaysia would be happy to see government money taken from health, education and social protection in order to bail out a failed Chinese property development.'
The burden could fall on Forest City's co-developer, Esplanade Danga 88, whose controlling stake is owned by Johor's sultan and which has a 40 per cent share in the project.
'Esplanade Danga 88 can become the master developer,' suggested Samuel Tan, CEO of Olive Tree Property Consultants. But it would 'have to find other developers or a joint venture partner' for the remaining islands.
New developers, however, may not wish to undertake the original plan. 'It's best if the market decides whether the area should be expanded or it should remain as it is,' said Adib. 'It'll have to depend on the demand.'
Without the Chinese, where this demand will come from is unclear.
Although prices in Forest City have come down since launch, its cheapest homes are typically priced at more than RM520 per square foot, compared to the median price of around RM400 in Johor Bahru.
With the Chinese not buying and prices 'too high for locals', there is a 'huge supply and no demand', said Williams.
'When you're so highly leveraged and have spent so much money, you can't really bring down the price of the units because then you're going to lose not just on individual units but across tens of thousands … of units.'
Recent revisions to the Malaysia My Second Home (MM2H) programme — a long-stay visa programme — could expand the foreign buyer pool, however, beyond the Chinese.
Under the previous government, principal applicants had to park RM1 million, for example, in a fixed deposit to attain a five-year multiple-entry visa. The current administration has reduced this to US$150,000.
Lee is hopeful the current policy will help. 'We do receive some inquiries, and it seems to be generating positive feedback,' he said. 'And banks are looking to set up their office within Forest City.'
DOES IT STILL DESERVE ITS MONIKER?
For all the portrayals of Forest City as a ghost town before this, entrepreneur Her Kai, who owns two units in the development and lives there, does not think it deserves to be depicted as such.
'After the pandemic, there was a lot of negative news, of which about 60 to 70 per was false, in my opinion,' said the 40-year-old, who was born and raised in Shanghai but has made Malaysia his home since 2019.
'There are plenty of people, including tenants and owners. … I know the real situation. If it were truly a ghost town, we'd all have left.'
Certainly, there are more occupants now, said Mohd Nizamuddin Zainuddin, 35, who moved to Forest City with his wife just before the pandemic struck and is still renting a unit there.
This is also the case compared to 2023, when 9,000 people were living there. And its landscape has been well maintained, the businessman added. 'If I can afford to own a house here, I'll continue living here.'
Some 30 condominium blocks have been completed, along with dozens of landed homes. With the uptick in occupancy, businesses have followed suit.
Felix Lam used to work in Kuala Lumpur, offering internet services to consumers. But he decided to relocate to Forest City to meet the demand for connectivity on the island.
'Many people here still have a wait-and-see attitude, wondering whether it can grow and help their business thrive,' said Lam, who also rents one of the apartments for his staff, paying RM1,500 a month.
'My perspective is different. I believe that even though Forest City had a slow start, there's a high demand and very high requirements. As long as we provide good services, it shouldn't be a problem.'
More supermarkets and food outlets are opening in the area, according to Lee. And locals are patronising places there for recreational purposes, 'so it isn't really a ghost town', said Olive Tree's Tan.
'But the management hasn't addressed this issue very well by putting up a more positive narrative (of) the development and attraction of Forest City,' Tan added.
From the outside, Faezatul Khatimah did wonder whether people would want to rent in Forest City because 'it didn't seem to have that many occupants' three years ago, when she ventured into real estate to earn some side income.
That was when she saw an opportunity. 'I found out that many people came here every day to view the houses,' she recounted, 'so I started uploading posts on social media platforms like Facebook and TikTok.'
Demand was high enough that she eventually became a full-time real estate agent, and she finds herself a lot busier these days. One of her clients is Wafa.
'Looking at the facilities, looking at the environment, looking at everything here,' said Wafa, 'I think it's not the ghost town that people have been talking about.'
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CNA
2 hours ago
- CNA
IN FOCUS: If ‘government cannot pay for everything', how can Singapore sport get more private funding?
SINGAPORE: When Singaporean water polo player Lee Kai Yang first reached out to companies in 2017 to form partnerships, many were reluctant. The national team captain and three-time Southeast Asian Games gold medallist was looking for help to cover expenses related to his sport, but soon realised 'brands didn't understand athletes'. 'They just saw me as any other influencer. And if I were to just pit myself against any other influencer, I'm nowhere near,' he said, adding that the companies cared more about his number of followers and how popular he was on social media. 'That was something that I was very frustrated with in the beginning.' Over the years, elite athletes like Lee as well as some national sports associations (NSAs) have struggled to secure private sector funding, as CNA found in interviews with several stakeholders in Singapore's sporting ecosystem. Uneven levels of visibility and interest in different sports have been some contributing factors. Experts offered suggestions going forward, ranging from national-level initiatives to a focus on individual storytelling, as NSAs themselves continue to find ways to make things work. A 'DEPRESSING' PICTURE? No public information exists on the aggregated ratio of private to government funding in sport in Singapore. In 2017, it was revealed that governing body Sport Singapore (SportSG) provided funding to 45 out of 63 eligible NSAs, to support their organisation functions, outreach programmes, training facilities and high-performance sports plans. More recently, the government in 2022 said it had pumped about S$70 million (US$54.5 million) into the national high-performance sport system. A handful of national scholarship schemes also offer financial support to athletes. To get corporates on board, a One Team Singapore Fund was launched in 2017, with the government matching dollar-for-dollar donations to back national athletes. Among early contributors to the fund were Deloitte and Fullerton Health, which pledged S$150,000 and S$250,000 respectively. More than 90 corporates have contributed to the fund since, said SportSG in response to CNA's queries to authorities on private sector funding. A spokesperson also pointed to the Singapore National Olympic Council's Major Games Awards Programme or MAP, a cash incentive scheme supported by the government's Tote Board but funded by private sponsors. Singapore's S$1 million Olympic gold medal payout, under MAP, is known to be the highest globally. A scholarship supported by Singaporean tycoon Peter Lim has also given out more than S$11 million to thousands of local athletes since its inception in 2010. SportSG told CNA that donations to the sports sector increased from S$7.9 million in FY2021 to S$13 million in FY2023. But this was the lowest among all sectors, accounting for less than 1 per cent of all donations that financial year. Deloitte Southeast Asia's sports business group leader James Walton said that apart from a 'core' group of large local firms such as DBS and OCBC banks as well as SingTel lending their financial muscle to sport, the overall picture was a 'pretty depressing' one. 'I think there's a bit of stigma; there's a perception issue here that when somebody says 'do you want to sponsor sports?' – for a lot of people it's a 'no' before there's even any discussion.' Former Singapore Sports Hub chief executive officer Oon Jin Teik argued that in the last two decades, there has been a 'diversification and professionalisation' of sports sponsorship here. But he acknowledged that while major events such as the Formula 1 Singapore Grand Prix have attracted international sponsors, challenges persist at the grassroots and semi-professional levels, with many local sports organisations struggling to secure 'consistent and substantial' corporate backing. SPONSORS ALWAYS 'BACK OF MIND' Former national fencer and sports administrator Nicholas Fang told CNA that 'if you only put your hand out to the government, the government cannot pay for everything'. But at the same time, not all NSAs are capable of securing sponsorships on their own, he added. Even for those with the know-how, there are other difficulties. For some, it starts with trying to promote sports that lack mass interest in Singapore. The Singapore Sailing Federation, for one, has to get through 'a lot of nos' before getting a yes, said chief executive officer Leslie Tan. 'In some ways, sailing is not a sport that you can easily understand … as quickly as some other sports,' he added. While the search for sponsors is always on "the back of the mind" for the Singapore Canoe Federation (SCF), it also often faces a lack of awareness of the multiple sports under its umbrella – from sprint kayaking to stand-up paddling, among others. 'Corporate sponsors are an essential piece,' said its general manager Matt Lee, noting that they help an NSA move towards building its own revenue streams and eventually becoming more self-sustaining. For Olympic wrestling, which doesn't have a large local following, sponsors are often former athletes; people with connections to countries with strong background in the sport; or family members of wrestlers themselves, a spokesperson for the Wrestling Federation of Singapore told CNA. And given that rugby's visibility is not high locally, the Singapore Rugby Union, too, taps on existing connections to bring in new sponsors, said its general manager Sidney Kumar. 'If your sport is not popular, then you have to try harder. If your sport is popular, you have to make sure it remains popular,' added Professor David Tan, vice-president of business development and communications at the Singapore Badminton Association. Even for golf, perceived by some as a sport for the affluent, there can be potential challenges in dealing with corporations and their expectations for returns on investment (ROI) – which can include opportunities to interact with top professionals. 'Sponsors also naturally gravitate toward world-class athletes and events, making it more challenging to secure sponsorships for developing athletes or grassroots programmes,' said the Singapore Golf Association's chief executive officer Joshua Ho. 'BANG FOR THEIR BUCK' Asked what else could be holding corporations back, Deloitte's Mr Walton said Singapore's small domestic market doesn't help when companies are looking to get 'bang for their buck' from a marketing point of view. He cited regional neighbours Indonesia, Philippines, Thailand, Vietnam and Malaysia as larger markets 'which lend themselves more to a B2C (business to consumer) play and a potential ROI'. For Indonesia's football federation, approximately 70 per cent of funding comes from the private sector. In comparison, 80 per cent of the Football Association of Singapore's funding in the last financial year came from SportSG. In the Philippines, where basketball is most popular, funding comes from private corporations rather than the government. Teams in the country's professional league are also owned by conglomerates and companies. SportSG highlighted to CNA that in Thailand, several major corporations sponsor national teams; while in Japan and Korea, companies own and fund sports teams. Another factor is Singapore's sporting culture – or lack of a strong one. 'A vibrant sporting culture not only boosts participation rates but also generates passionate fandom, media coverage and community narratives,' said Mr Oon, himself an Olympian in swimming. 'In Singapore, while interest in certain sports … football, badminton, swimming … is strong, the overall sporting culture remains less fervent than in more sports-centric societies, affecting sponsorship prospects.' Mr Walton warned of a knock-on effect of funding sources drying up. 'Without the investment, you create a vicious circle where the teams are not going to get better, the leagues are not going to get better, and the management and governance also does not get better,' he said. 'Because with less money in the system, it's more difficult to hire good people, retain good people, and have the levels of staffing that you need to have to properly run the sports as well.' THE 'BIGGER PICTURE' CNA interviewed multiple companies which have partnered Singapore's sports organisations and athletes. They spoke of wanting to contribute to society and to bridge any gaps left by insufficient public funding – but acknowledged that they also stood to gain visibility and other upsides from such deals. Take Adonis Skincare and the Major 99 karaoke and entertainment centre, two SMEs throwing their weight behind the relatively niche sport of tchoukball – with an eye on reaching youths. 'Sports is a good way to connect with the younger generation,' said Mr Shane Cheng, founder of Major 99, which got roped in via the Ang Mo Kio Constituency Merchants Association. 'I feel that new and emerging sports is where Singapore (can have a) competitive edge.' The Tchoukball Association of Singapore's secretary Delane Lim said the strategy was always to look for smaller, local firms to partner with and 'create a village'. 'It also provides messaging to other SMEs that 'actually, I don't need to be a multi-million dollar SME to be part of sports',' he said. Then there's Sunrise & Company, the Singapore distributor for the Yonex brand and a fixture in the local scene for decades now. It started partnering the SNOC from the 1973 Southeast Asian Peninsular (SEAP) Games, providing tracksuits for participating athletes and officials. Yonex-branded tracksuits and backpacks have been a constant companion to Singapore's athletes at major Games since. 'We believe supporting athletes and being part of Singapore's sporting journey builds our brand in meaningful ways,' said Sunrise & Company's head of promotions Shaan Seth. 'The most valuable investments are the ones that build relationships with the community over time, and we think doing the right thing is good business in the long run.' That approach is shared by Yeo's, a major player in the local sports scene. The beverage company signed a three-year partnership with kitefoiler and Olympic bronze medallist Maximilian Maeder in 2022, and recently extended it by another four years. As part of the new deal, it pledged another S$180,000 to the sailing federation, which will be matched by the OTSF. 'We do not measure our bottom line by short-term monetary gain alone,' said Yeo's chief executive officer Ong Yuh Hwang. "We practice the philosophy of wanting to 'do good business and do good in business'." Maeder told CNA that a key consideration was whether the sponsorship would also help sports in Singapore at large. Mr Albert Chiu, Swiss private bank EFG's executive chairman for Asia-Pacific, also spoke of eschewing narrow views in favour of 'the bigger picture'. The Singapore branch of the bank first got involved in golf in 2018, sponsoring Koh Sock Hwee, one of Singapore's first female professional touring golfers. It then partnered the NSA to set up an elite young golfers scholarship programme. 'I can understand why some corporations may have reservations in investing in local sport in Singapore. It is a relatively small market, and its commercial impact might not seem immediately apparent compared to more established sporting nations,' said Mr Chiu. But EFG's experience supporting golf in Singapore has been overwhelmingly positive, he said. 'Sport has the ability to unite a nation. As we have all experienced with Joseph Schooling's gold medal and Max Maeder's bronze, these are nation-defining moments.' The SGA's corporate sponsorship income has grown by more than fourfold over the past three years. It has three main corporate income streams – sponsorships for programmes (such as high-performance or junior development), sponsorships for events, and donations from fundraising activities. Together, these contribute to about a third of the NSA's total annual income. Income Insurance chief customer officer Dhiren Amin also noted that companies tend to sponsor sports and sporting talents that are already doing well. But his firm recognises that this is a "chicken and egg" issue. Without funding, athletes could be unable to train full-time or have the opportunity to achieve their full potential, he said. 'In working with (Singapore Athletics), we provide some level of flexibility for them to identify where the gaps are that require support, and channel the funds to fill (them),' said Mr Dhiren. The company is a major partner of Singapore Athletics. Last year, it announced an annual sponsorship of S$100,000 as part of a development fund for the next five years, building on an earlier agreement to provide cash sponsorship and insurance coverage for more than 120 athletes and staff members. DBS, which backs the Sailing at the Bay programme and is one of the primary sponsors of the Singapore National Paralympic Council's Athletes Achievement Awards (AAA), said its support was not "conditional" on athletes' achievements. "What matters to us is their character and commitment," said Ms Karen Ngui, head of DBS Group strategic marketing and communications. "At its core, this is why we support athletes: They embody and reflect key values that we believe in, and we hope everyone – be it aspiring athletes or the wider public – can draw inspiration and strength from their journeys, just as we do." STORY SELLING There is much more that stakeholders up and down the ecosystem can do, experts told CNA. Mr Oon suggested that SportSG set up a national sponsorship platform, describing it as a unified, government-backed vehicle to match sponsors with teams, athletes and events. It would be a centralised source of information, guidelines and opportunities – streamlining the sponsorship process and lowering barriers for new entrants, he said. The golf association's Mr Ho called on NSAs to view sponsorships less as 'one-way support' and more as partnerships. 'NSAs need to communicate the value of sponsorships clearly and show how they can value-add in creative ways,' he said. One way his association has done so is to organise introductory golf sessions for sponsors' clients and employees, conducted by the sponsored athletes. 'Through such activities, athletes also have the opportunity to share their personal journeys, helping sponsors and their stakeholders better understand the dedication and challenges in an athlete's career,' said Mr Ho. The stories behind each athlete and sport are pivotal – with or without the medals to accompany them, said those who spoke with CNA. Mr Walton from Deloitte, which used to sponsor the football Women's Premier League, said: 'Storytelling around adversity, challenges, triumph, teamwork, diversity, opportunities for youth, bringing the community together – all of those are in my branding strategy'. Singapore Athletics said it has seen a 'significant' increase in interested corporate sponsors, with its number of partners growing from five at the start of 2023 to 11 today. 'This surge is fuelled by the outstanding performances of our athletes in recent years, including record medal hauls at major Games and a sharp increase in national records being broken,' said a spokesperson. 'Athletes such as Shanti Pereira have also risen to star status, putting our sport in the national spotlight and making it more attractive to potential partners.' The rise of badminton world champion Loh Kean Yew has also helped the NSA, with vice-president Prof Tan calling it a 'tsunami effect' that has attracted sponsors in its wake. About 55 per cent of the badminton association's annual income comprises funding from SportSG, with the rest sourced from corporate sponsorships and commercial revenues that include events and facilities' rental. At the sailing federation, which has benefited from kitefoiler Maeder's rise to prominence, the goal is to showcase and tell the stories of all athletes, regardless of success. 'There's also the story of trying to get to the pinnacle.. It's not all podium and medals,' said Singapore Sailing CEO Mr Tan. 'I've been trying to market or provide that story as well to other sponsors. It's a continual search, I think it will take a particular type of sponsor who wants to get behind this story.' Mr Fang, who had to canvass sponsors when he was an athlete himself, said sportspeople also need to be "proactive" about getting corporate funding. 'One big positive change has been social media. Now every athlete has their own platform, it's just a question of how they want to optimise it to be of value for brands to want to associate themselves with the athletes as well,' said the director of local sports consultancy Novastella. One standout in this regard is perhaps distance runner Soh Rui Yong. The multiple national record holder and SEA Games medallist has partnerships with brands such as Hugo Boss, Pocari Sweat and Under Armour. He told CNA that while it was important to be his 'unique authentic self', he also has to see from a potential sponsor's perspective what he brings to the table. 'You need to stand out from the crowd in some way,' he said. '(And sponsors) have to see the value in you – either that or you have good connections … It's hard.' Eight years on from his first attempts to get sponsored, water polo player Lee is making things work. In part, this is by helping brands better understand athletes: He now goes into pitches with a slide deck spelling out his sporting achievements and core values. 'I realised I needed to educate brand partners about my USP (unique selling point),' he said. 'And in general, my USP is really about being able to add that level of reputation on top of whatever general marketing they are doing. 'I always angle it as a collaboration – the mindset coming in (for the company) is that it is going to be a win-win partnership.' Lee has in recent years inked deals with a number of partners, totalling about S$50,000 in cash and kind. The brands range from interior design firm My Reno Diary to mattress company Tempur. This maturing of Singapore's sports scene, across athletes and commercial entities alike, is cause for optimism, said experts. 'We're seeing the needle move a little bit; we're seeing more corporates getting excited about sports and the opportunities,' said Mr Fang. 'But we really need to embed sports; sporting culture into our national DNA before we'll see sponsors coming to knock on the doors of NSAs or sports events … rather than the other way around. 'We have some way to go.'
CNA
3 hours ago
- CNA
Commentary: NDR 2025 – traineeships can channel young talent into emerging sectors
SINGAPORE: The global economy in 2025 is expected to see sluggish growth, with some forecasts warning of the weakest expansion since the COVID-19 pandemic. While some regions might experience moderate growth, others could face significant headwinds, particularly due to factors like trade tensions, geopolitical risks and technological disruptions. Against this backdrop, Prime Minister Lawrence Wong struck a candid but forward-looking tone in his National Day Rally speech. He acknowledged the uncertainties but also emphasised that Singapore's workforce and businesses must stay nimble and seize new opportunities. One of the most significant measures unveiled was a government-funded traineeship programme for Institute of Technical Education (ITE), polytechnic and university graduates. It aims to offer fresh graduates more training opportunities, allowing them a foothold in the working world. POTENTIAL PITFALLS While more details about the scheme are forthcoming, several concerns naturally arise. Employers – especially small- and medium-sized enterprises (SMEs) – are adopting cautious hiring practices in light of rising costs and uncertain demand. This raises the risk that trainees may be seen as a source of temporary labour rather than long-term investments, with no guarantees of full-time conversion once funding ends. Furthermore, many SMEs face manpower constraints and may hesitate to take on trainees, particularly in areas where artificial intelligence, productivity tools and automation are rapidly replacing routine roles. If participation is uneven, the programme could end up benefiting primarily large firms that already have training infrastructure in place, leaving smaller companies sidelined. LINKING TRAINEESHIPS TO GROWTH SECTORS For the traineeship scheme to make a real difference, it will need to be strategically aligned with sectors Singapore is prioritising for long-term growth. Mr Wong highlighted two such sectors during his speech: biomedical sciences and quantum technologies. The biomedical sector employs over 24,000 workers across more than 80 pharmaceutical and medical device plants in Singapore. The pharmaceutical sub-sector alone has recorded a 70 per cent increase in employment over the past decade. From research scientists and engineers to regulatory specialists and commercial leads, the industry is hungry for diverse talent. With multinational companies such as GSK, Pfizer and Novartis operating in Singapore, the sector presents fertile ground for trainees to build relevant skills and secure permanent roles. Government agencies have long partnered with educational institutions to build specialised talent pipelines. For instance, the Economic Development Board's (EDB) Strategic Training and Attachment Programme provided on-the-job training for young Singaporeans in growth areas such as biologics and nanotechnology. By tying traineeships directly to such frontier areas, graduates can gain early exposure to in-demand roles while employers benefit from a steady inflow of motivated talent. Another growth sector Mr Wong highlighted is quantum computing, an area where Singapore has already invested over S$400 million, with another S$300 million committed until 2029. Already, more than 10 local quantum startups have sprung up in areas such as communication, simulation, photonics and sensors, supported by a pool of 350 researchers and PhD candidates. Major corporations like IBM are also working with local universities on quantum computing research and development. Here too, training programmes could be a powerful lever. For instance, OCBC aims to train more than 100 employees to develop new applications of quantum computing, such as in pricing financial instruments and strengthening defences against fraud and cyberattacks. By directing trainees into such structured programmes, Singapore could accelerate the development of a quantum-ready workforce while ensuring graduates are not left adrift in oversupplied fields. BUILDING CONFIDENCE THROUGH CONVERSION A potential anxiety among fresh graduates is whether traineeships will translate into real, lasting jobs. To address this, the government may need to set clearer expectations for employers receiving subsidies. Incentives could be calibrated so that firms are rewarded not merely for hosting trainees, but for converting them into full-time hires where possible. This is especially important for SMEs, who may lack the bandwidth to design robust training roadmaps. Support in the form of shared training resources, mentorship networks and co-funding of permanent roles could help smaller firms see trainees not as temporary helpers, but as future assets to groom. If executed well, the traineeship programme could serve a dual purpose: cushioning graduates against a weak job market while reinforcing Singapore's position as a hub for frontier skills and industries. Just as earlier manpower initiatives in IT and finance helped build critical mass, today's efforts must be focused on growth sectors. The new traineeship programme can become more than a stopgap measure – it can be a cornerstone of Singapore's next phase of economic transformation. With biomedical sciences advancing rapidly, and quantum computing poised to transform industries from finance to logistics, Singapore has the opportunity to channel young talent into the sectors shaping the economy of tomorrow.
CNA
8 hours ago
- CNA
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