Singapore turns 60 – What challenges lie ahead? (Part 1 of 3)

This article is part of a three-piece series on Singapore SG60 special.

I. Introduction 

The excitement of past accomplishments is balanced by a realistic evaluation of the difficult obstacles that lie ahead as Singapore gets ready to celebrate 60 years of independence. In comparison to its early decades, the current global environment is far more unstable and complex due to growing geopolitical competition, economic fragmentation, and the undeniable effects of climate change. In order to preserve social cohesiveness and economic vibrancy, creative solutions are needed domestically due to a rapid demographic transition and changing cultural expectations. The initial section of the special commentary carefully breaks down these complex pressures, showing how each obstacle combines to form a "gathering storm" that requires a previously unheard-of degree of strategic vision and systemic change in order for Singapore to not only survive but flourish on its path to SG100.

II. The economic tightrope: Navigating global volatility and redefining growth

The strength of the global economy and the stability of the international trading system are closely related to Singapore's economic dynamism. External shocks have a disproportionate impact on this tiny, open economy that is heavily reliant on trade and foreign investment. The complex array of challenges that the current global landscape presents puts Singapore's traditional growth methods to the test and calls for aggressive modifications.

1. Intensifying geopolitical rivalry and trade fragmentation: Global trade, investment flows, and technology supply chains are all significantly impacted by the growing strategic rivalry between the US and China. This competition can take many different forms, such as export restrictions on vital technologies, punitive tariffs, and a general movement towards economic "decoupling" or "de-risking." A more fragmented global trading system is the end outcome, marked by a return to protectionism, the weaponization of economic instruments, and a drive towards robust but frequently inefficient regional supply chains.

• Impact on Singapore: Being a major player in international supply chains and a country that depends heavily on commerce, Singapore is particularly sensitive to these changes. Updated economic projections clearly show the immediate effects. The Monetary Authority of Singapore (MAS) and Singapore's Ministry of Trade and Industry (MTI) drastically lowered the country's 2025 GDP growth projection from a previous 1-3% to 0-2%. They attributed this recalibration to the impact of reciprocal tariffs on international trade and the escalating trade tensions between the US and China (ICIS, April 2025). All of Singapore's export-oriented industries, especially manufacturing, are severely impacted by this slowdown. For example, decreased activity in the electronics cluster was a major factor in the manufacturing sector's much slower development in the first quarter of 2025 when compared to the previous quarter (MAS, MTI, April 2025).

As a vital hub in international supply chains for production and trade, Singapore is also affected indirectly, therefore the repercussions go beyond direct trade. China and other nations use the intermediary goods and services it exports to them for their own exports to the United States. Singapore's closely integrated economy experiences a "multiplier effect" and a more general "negative income and demand shock" when these important trading partners are subject to tariffs or decreased demand (MAS, April 2025). Additionally, almost 55% of Singapore's domestic exports to the US are made up of goods subject to the baseline US tariffs; additional, albeit smaller, shares are added by product-specific duties on steel, aluminium, and vehicles (MAS, April 2025).

Beyond the obvious economic numbers, increased uncertainty in trade and geopolitics undermines business confidence, which in turn causes a wider decline in international investment and consumption. This further dwindles Singapore's prospects for growth and may have an effect on the creation of jobs in a wider range of industries (MAS, April 2025). According to some analysts, a "mild technical recession"—two quarters in a row with negative growth—was undoubtedly possible (Dr. Chua Hak Bin, Maybank, April 2025).

Governmental response 

• Economic diversification and supply chain resilience: Singapore has stepped up its long-standing economic diversification and supply chain resilience fortification strategy in response to these difficulties. The Ministry of Trade and Industry's Singapore Economy 2030 vision is organised around four main pillars:

• Trade 2030: This pillar seeks to increase trade internationally, diversify the kinds of trading operations carried out in Singapore, and dramatically increase Singapore's trading volume. In order to do this, Singapore must improve its economic integration and connectedness by utilising its vast network of 26 Free Trade Agreements (FTAs), which together cover economies that account for more than 85% of the world's GDP (EDB, MTI). As evidenced during the COVID-19 pandemic, when Singapore kept its ports open and did not impose export controls, these agreements offer preferential access to foreign markets and enable the free movement of commodities even during times of global disruption.

• Manufacturing 2030: By 2030, it wants to boost manufacturing value-add by 50%, establishing Singapore as a global centre for advanced manufacturing expertise, innovation, and business. With a strong growth rate of 13.2% in 2021—nearly twice the rate of the year's overall economic growth—and a 22% GDP contribution in 2021, manufacturing continues to be a strong sector in Singapore (EDB). In high-value industries including electronics (semiconductors), precision engineering, energy & chemicals, aerospace, and biomedical sciences, the goal is to draw in cutting-edge investments. This change is closely related to Industry 4.0 technology (such as robotics, artificial intelligence, and the Internet of Things), which have improved the workforce's profile and increased production efficiency. In fact, 68% of Singaporeans and PRs employed in local manufacturing in 2021 held Professional, Managers, Executives, and Technicians (PMET) positions, a 6% rise from 2017 (EDB).

• Enterprise 2030: Aims to create and maintain a thriving network of Singaporean businesses that are prepared for the future and have the deep skills necessary to compete on a global scale. One way to do this is to assist regional SMEs with their internationalisation, innovation, and digitisation.

• Services 2030: Uses new growth prospects in sustainability and digitalisation (MTI) to expand the services sectors and establish Singapore as a major, dynamic centre for business, lifestyle, and tourism.

In addition to these overarching economic plans, Singapore has implemented particular supply chain resilience measures:

• Diversification of suppliers: Diversifying its sources for essential goods, raw materials, and intermediate products is a strategic imperative for Singapore. To reduce over-reliance on any one supplier, for example, in 2019 basic materials such as fuels, steel, and grain were imported from more than 157 partner nations, and chemicals from more than 172 partner countries.

• Strategic inventory management & stockpiling: In order to ensure availability during emergencies, Singapore keeps national stockpiles of necessities like medical masks, granite for building, and rice (under the long-standing Rice Stockpile Scheme since 1968).

• Domestic production capabilities: Singapore proved its adaptability during the COVID-19 pandemic by repurposing local businesses from sectors like printing and gaming to establish surgical mask manufacturing and by gaining the capacity to manufacture essential parts like melt-blown polypropylene filters, which improved control over the whole supply chain.

• Technology-driven logistics: When it comes to implementing automated and digital solutions, Singapore is in the forefront. The Port of Singapore optimises cargo handling and vessel scheduling by leveraging AI and IoT sensors. In order to establish new sustainability standards, the PSA Supply Chain Hub at Tuas, which is scheduled to open in 2027, will incorporate sophisticated robots, automation, and efficient logistics (Paul Hype Page, Frontier Enterprise). For improved supply chain visibility, predictive analytics, and automated procedures, investments in AI, IoT, and blockchain are essential.

2. Inflationary pressures and rising cost of living: Rising prices continue to be a major problem for people and businesses, affecting purchasing power and competitiveness, even though Singapore has traditionally handled inflationary pressures better than many other nations.

• Current inflation landscape: In June 2025, Singapore's core inflation rate, which takes into account household expenses by excluding the costs of private transport and lodging, stayed constant at 0.6% annually (MAS, MTI, July 2025). During the same time frame, the headline inflation rate remained constant at 0.8%. The MAS and MTI argue that "uncertainties to inflation remain high amid the increased risks in the external environment" (ST, CNA, July 2025), despite the fact that these numbers are lower than some economists' early projections. While prices for food, lodging, services, electricity, and fuel witnessed smaller rises or decreases, retail products (such as apparel and footwear) and private transportation (such as automobile prices and petrol) saw price increases (ST, CNA, July 2025).

• Contributing factors: Singapore's inflation is caused by a combination of internal and foreign forces. Global commodity prices (such as those for gas, metals, oil, fertilisers, wheat, and maize) have increased as a result of the conflict between Russia and Ukraine. Increased freight rates and import costs are a result of ongoing worldwide supply chain bottlenecks that were first made worse by the Covid-19 outbreak (Singapore Company Incorporation.sg). Rising labour costs brought on by tighter border controls and robust domestic demand—such as for real estate and Certificate of Entitlement (COE) premiums for automobiles—also drive up prices domestically.

• Impact on businesses and households: If wages do not keep up with the rising cost of living, inflation raises the cost of doing business for enterprises, which might reduce profit margins and make it more difficult to recruit and retain talent (Singapore Company Incorporation.sg). Households' purchasing power is directly diminished by inflation, and lower-income households are frequently disproportionately impacted. Although the impact has been mitigated by increased government subsidies (e.g., through Budget 2025), households in the top 20% of income earners saw higher cost of living increases (1.2% in the first half of 2025) than did middle- and lowest-income earners (0.8%) and those with lower incomes (0.6% excluding owner-occupied rentals) because they spent more on things like private transport (SingStat, ST, July 2025).

III. Societal shifts and the fraying social compact

Significant socioeconomic changes brought about by Singapore's quick development have affected social cohesiveness and called for a reassessment of the social contract, especially in light of the country's ageing population and changing desires.

1. Accelerating aging demographics and workforce constraints: Singapore's population is ageing at one of the fastest rates in the world, posing significant long-term problems for the country's social structure and economy.

• The scale of aging: In 2024, Singapore's total fertility rate (TFR) fell to a record low of 1.04 (SingStat), much below the replacement threshold of 2.1. This suggests that below-replacement fertility has been the norm for decades. At the same time, life expectancy at birth has been rising gradually, and in 2024, it reached an astounding 83.5 years (SingStat). According to these trends, Singapore is expected to become a "super-aged" country by 2030, with over 21% of its citizens being 65 years of age or older (AMRO). Similar to developed economies like South Korea and Japan, where more than 25% of the population is already 65 or older, Singapore is experiencing an accelerated demographic transition. This figure contrasts sharply with the estimated 12.8% for Asia as a whole by 2030 (United Nations via Number Analytics).

• Impact on workforce: The old-age dependency ratio, or the number of dependents (those 65 and older) per 100 working-age people, rises in direct proportion to a declining working-age population. According to SingStat, the overall dependency ratio in Singapore is expected to rise from 40.2 per 100 in 2020 to 60.1 per 100 by 2035. As a result, the declining producing sector of society is under increasing pressure to provide for a growing number of dependents. The basic demographic imbalance still exists even though the Ministry of Manpower's (MOM) 2023 resident labour force participation rate for people 65 and older was 28.8%, indicating attempts to promote active ageing.

• Impact on healthcare and social services: The demands and expenses of healthcare will unavoidably rise significantly as the population ages. Significant increases in healthcare spending are anticipated by the Ministry of Health (MOH), placing a burden on public coffers and necessitating significant investments in new hospitals, community care centres, and a greater workforce of healthcare professionals with expertise in eldercare. In addition to healthcare, public resources and carers are under pressure due to the growing demand for social services, senior-friendly infrastructure, and long-term care.

Response: 

Silver economy and workforce adaptation: Singapore is aggressively advancing a "silver economy," encouraging creative solutions and companies that meet the needs and goals of the elderly. Initiatives include creating new eldercare models, offering incentives to businesses to adapt work to be age-friendly, and promoting active ageing through community initiatives. Introduced in 2023, the Majulah Package offers targeted CPF top-ups and MediSave subsidies as part of a major budgetary commitment to improve retirement and healthcare adequacy for Singaporeans born in 1973 or earlier (Ministry of Finance - MOF). Singapore carefully regulates its reliance on foreign labour (about 1.3 million non-domestic foreign employment in 2024, MOM) while concurrently strengthening indigenous capabilities in order to solve larger workforce issues.

2. Talent attraction, retention, and skills gaps: A skilled, flexible workforce is essential to Singapore's knowledge-based economy.

• Global competition for talent: For skilled labour, Singapore must contend with intense international competition. In order to stay appealing, it has launched programs like the Overseas Networks & Expertise (ONE) Pass, IT.Pass, and the Global Investor Programme (GIP) to draw in top global talent, IT leaders, and entrepreneurs, respectively. These passes make it easier for people who can make major contributions to Singapore's economic and innovation ecosystem to enter the country.

• SkillsFuture movement: One of the main pillars of Singapore's approach to lifelong learning and ongoing skill development is the national SkillsFuture initiative, which was introduced in 2015. With a credit system, it gives Singaporeans the ability to enrol in a variety of courses. More than 600,000 Singaporeans have taken part in SkillsFuture programs by 2024 (SkillsFuture Singapore, or SSG), using their credits for classes in cutting-edge fields like advanced manufacturing, data analytics, artificial intelligence, and green economy skills. Maintaining the workforce's relevance and productivity in the face of swift technical breakthroughs and changing industry expectations requires constant reskilling and upskilling.

The occupations Transformation Maps (JTMs), created by Workforce Singapore (WSG) in collaboration with industry, examine the effects of major trends such as automation, artificial intelligence (AI), digitalisation, and sustainability on occupations in certain sectors and pinpoint opportunities for workforce reskilling. Since 2019, 18 JTMs have been introduced, encompassing industries such as financial services, food manufacturing, built environment, logistics, and aviation (WSG).

• Productivity growth imperative: With fewer workers as a result of demographic changes, economic growth depends critically on ongoing productivity increases. From 2019 to 2023, Singapore's labour productivity growth averaged about 1.0% each year (MAS, MTI). This is intended to be further elevated by the Industry Transformation Maps (ITMs) and Jobs Transformation Maps, which promote automation, innovation, and digitisation across all economic sectors.

3. Income inequality and social mobility: Despite Singapore's efforts to create a meritocratic society, issues with economic disparity and maintaining social mobility persist.

• Gini coefficient: In 2023, the Gini coefficient—a gauge of income inequality—was 0.433 before to taxes and government transfers. It decreased to 0.371 (SingStat) after taking them into consideration, demonstrating the important role that government initiatives play in reducing inequities.

• Government interventions: A number of progressive policies are used in Singapore. Through a tiered wage structure connected to productivity gains and skill upgrades, the Progressive Wage Model (PWM), which is being used in industries like cleaning, security, landscaping, and soon food services and retail, seeks to increase salaries for lower-paid workers. For lower-paid workers, the Workfare Income Supplement (WIS) Scheme offers CPF (Central Provident Fund) top-ups and direct income supplements. Important redistributive tools that raise real incomes and living standards for a large portion of the population are subsidies for healthcare, education, and public housing (HDB grants).

• Maintaining social mobility: One of the top priorities continues to be making sure that people from all socioeconomic backgrounds have the chance to progress. Regardless of where one starts, this entails consistent investments in early childhood development, occupational training, and education to lay a solid basis for success in the future.

4. Mental health and well-being: Growing worries about mental health are a result of the stresses of a highly competitive society, demanding work cultures, and demanding academic settings.

• Prevalence: According to a 2022 survey conducted by the Ministry of Health (MOH) and Institute of Mental Health (IMH), 13% of Singaporean adults have a mental illness at some point in their lives, with major depressive disorder and anxiety disorders being prevalent. Teenage mental health is a special concern, as the prevalence of mental health problems among students is on the rise due to peer pressure, academic performance stress, and future fears.

• National strategy: The National Mental Health and Well-Being Strategy seeks to lessen the widespread stigma attached to mental illness, enhance mental health services in a variety of contexts, and encourage mental health in schools and workplaces. This entails increasing the availability of mental health services in community, educational, and polyclinic settings in addition to more smoothly incorporating mental health services into primary care. To expand these efforts, more money and resources are being allotted.

5. Evolution of the social compact and governance: A solid social compact between the government and its people, based on meritocracy, trust, and efficient governance, has been the cornerstone of Singapore's stability. This compact is always changing.

• Evolving political landscape: Although the ruling People's Action Party (PAP) has always held a commanding lead, its percentage of the vote has fluctuated, most notably falling to 61.24% in the general election of 2020. The opposition parties' increasing organisational power and popularity among voters suggests that society wants more varied viewpoints and more political competition. This indicates that Singapore's political scene has matured, necessitating even greater responsiveness and consultation from the government.

• Forward Singapore: Launched in 2022, the continuing Forward Singapore (Forward SG) exercise is a major national engagement initiative aimed at reinvigorating and fortifying the social compact for the coming generation. Focussing on six major pillars—Jobs & Opportunities, Assurance for Families, Building Our Common Space, Being Singaporean, Stewarding Our Future, and United Singapore—it is a comprehensive consultative process that entails in-depth discussions with Singaporeans from all areas of life. By addressing underlying societal worries and promoting greater trust and shared ownership in the future of the country, the exercise seeks to co-create a more inclusive, equitable, and cohesive society.

• Reinforcing governance and integrity: One of Singapore's most important national assets that draws talent and investment is its reputation for good governance and zero tolerance for corruption. This reputation has been put to the test by recent high-profile events, including the corruption investigation involving a former minister and a well-known businessman, as well as problems with parliamentary behaviour. However, the government has sought to reinforce its steadfast commitment to integrity and accountability by treating these issues quickly and transparently, including by conducting full investigations, disclosing findings to the public, and taking swift disciplinary action when necessary. In order to maintain the strong, meritocratic leadership that has been a defining feature of Singapore's success, constant efforts are made to draw and keep top talent in the public sector.

IV. Geopolitical navigations: The art of small state survival

The existence and prosperity of Singapore, a small island state lacking a natural hinterland, are closely linked to its capacity to adeptly negotiate a complicated and increasingly fragmented global geopolitical environment. This necessitates shrewd diplomacy, strategic vision, and a constant commitment to moral foreign policy.

1. Balancing US-China rivalry: Perhaps the most significant geopolitical issue of our time is the growing strategic rivalry between the US and China. While fostering close commercial connections with China, Singapore also maintains strong security ties with the US. Singapore's strategic autonomy and economic potential are preserved by its "non-alignment" stance, which permits it to interact well with both powers without being compelled to take a side.

• Diplomatic engagement: Particularly within ASEAN, Singapore continuously promotes an open, inclusive, and rules-based multilateral system in international fora such as the World Trade Organisation and the United Nations. Its diplomatic approach prioritises communication, respect for one another, and amicable conflict settlement; it calls on major countries to reduce tensions and refrain from taking any measures that would destabilise the area.

• Economic diplomacy: To diversify its economic partnerships and lessen its over-reliance on any one market, Singapore makes use of its wide network of investment treaties and free trade agreements (FTAs) with many nations and blocs. One of the most important defences against geopolitical instability is this economic diversification.

• ASEAN centrality: As the foundation of regional peace and security, Singapore promotes the idea of ASEAN Centrality. Singapore cultivates a shared framework for managing external challenges by supporting programs that enhance ASEAN's unity, resilience, and economic integration (such as the ASEAN Economic Community and the Regional Comprehensive Economic Partnership, or RCEP). With 30% of the world's GDP and 30% of the world's population covered by the RCEP, which went into effect in 2022, ASEAN's crucial position in Asian economic dynamism is further cemented, and interconnection is strengthened as a safeguard against fragmentation.

2. Cybersecurity threats: Singapore, a highly digitalised country and a vital international centre for trade and finance, is constantly threatened by sophisticated cyberattacks. These come from terrorist organisations, multinational criminal syndicates, and state-sponsored actors and target national data, financial systems, and critical information infrastructure (CII).

• National cybersecurity strategy: With a focus on four main pillars—fostering a safer cyberspace, building a thriving cybersecurity ecosystem, improving international partnerships, and fortifying the resilience of vital information infrastructure—Singapore regularly updates its National Cybersecurity Strategy, the most recent of which was published in 2021. Public education initiatives, proactive threat intelligence sharing, and strong regulatory frameworks are all part of this.

• Regional and international cooperation: When it comes to developing regional cybersecurity capabilities, Singapore is at the forefront. Established in 2019, the ASEAN-Singapore Cybersecurity Centre of Excellence (ASCCE) facilitates intelligence sharing and increases collective resilience against cyber-attacks by offering ASEAN member states specialised training and technical help. Additionally, Singapore regularly engages in UN and other multilateral forums discussing worldwide cybersecurity standards.

3. Regional hotspots and trade route vulnerabilities: Singapore's security and economic vitality are seriously threatened by possible conflicts in hotspots in the region, especially the South China Sea.

• Critical sea lanes: An essential conduit for international trade is the South China Sea. These waterways handle more than one-third of the world's shipping traffic, which amounts to around US$3.4 trillion in yearly trade. A significant amount of this traffic is headed to or originates from Singapore's port, which is one of the biggest transhipment centres in the world. Singapore's trade, energy supplies, and general economic stability would all be significantly impacted if these vital water lanes were disrupted by piracy, conflict, or natural disasters.

• Diplomatic advocacy: Singapore continuously promotes the peaceful settlement of conflicts in conformity with international law, especially the United Nations Convention on the Law of the Sea (UNCLOS), while not being a claimant state in the South China Sea disputes. Additionally, it highlights the significance of overflight and freedom of navigation, both of which are essential to its trade and development.

V. Environmental imperatives: Water and energy security as existential challenges

Climate change and resource scarcity are more than just environmental problems for a small island nation with limited natural resources and high levels of urbanisation; they are existential dangers that require creative, extensive, and long-term responses.

1. Climate change vulnerability and coastal protection: Being a low-lying island nation, Singapore is particularly vulnerable to the effects of climate change, including increased extreme weather events and rising sea levels.

• Projections and impacts: Under a scenario with moderate emissions, the Intergovernmental Panel on Climate Change (IPCC) predicts that the global mean sea level will rise by 0.26 to 0.77 meters by 2100, possibly submerging large swaths of Singapore's coastline in the absence of mitigation efforts. According to the National Climate Change Secretariat (NCCS), Singapore's mean daily temperatures are also expected to rise by 1.4°C to 4.6°C by 2100. This would result in longer dry spells, more frequent and heavy rains, and higher heat stress, which will have an effect on biodiversity, energy demand, and public health.

Response:

• Multi-pronged coastal defence: Singapore is spending billions on coastline protection and climate adaptation. Over the next fifty to one hundred years, Singapore's coastal preservation projects could cost more than S$100 billion (PM Lee Hsien Loong, 2019). The "Long Island" project is a long-term, ambitious proposal to recover land off the east coast of Singapore that has been in the works for decades. By constructing a number of polders and seawalls, this project seeks to completely safeguard the coast from future sea level rise while also generating fresh land for future habitation, commercial establishments, and recreational areas. Singapore's proactive, multi-decadal planning for climate resilience and sustainable land use is highlighted by this integrated strategy. Additional steps include installing nature-based solutions like sea walls and mangroves, as well as raising new reclamation sites by at least 4 meters above mean sea level.

2. Water security: 

From scarcity to self-sufficiency: Singapore relies on imported water and a small number of local catchments because it has almost no natural freshwater resources. It is therefore among the world's most water-stressed nations.

• Historical context and present challenge: Singapore has always depended significantly on long-term arrangements to import raw water from Malaysia. In order to protect its future water needs from growing demand and possible external threats, Singapore has made impressive progress towards self-sufficiency while these agreements are still in effect.

• The "Four national taps" strategy: The Public Utilities Board (PUB) created an all-encompassing water management plan to guarantee a varied and robust water supply:

1. Local catchment: With approximately two-thirds of the island set aside as water catchments, Singapore aims to maximise the amount of rainfall that falls on its territory. For example, Singapore's biggest freshwater reservoir was converted into a distinctive urban catchment by the Marina Barrage.

2. Imported water: Gradually reducing reliance on this tap through increased domestic production.

3. NEWater: Superior recycled water made using UV disinfection and cutting-edge membrane technologies (microfiltration, reverse osmosis). Currently providing for about 40% of Singapore's total water demand (PUB), NEWater is a key component of the country's water sustainability. By 2060, it is expected to supply up to 55% of the country's water demands (PUB). By effectively channelling all spent water to centralised water reclamation plants for treatment into NEWater, the Deep Tunnel Sewerage System (DTSS), a vast network of subterranean sewers, demonstrates engineering prowess for managing water resources and releasing valuable land.

4. Desalinated water: Reverse osmosis is an energy-intensive technique that turns saltwater into drinkable water. Approximately 25% of Singapore's water demand (PUB) is now met by the country's four desalination plants. By 2060, desalination is expected to supply up to 30% of the country's water needs thanks to the activation of additional plants (such as the soon-to-be Jurong Island Desalination Plant) (PUB).

• Demand management: Strong demand control techniques, such as universal water metering, tiered water rates that promote conservation, and intensive public education campaigns on water conservation, are a good complement to supply diversification. As evidence of these efforts, Singapore's daily per capita water use in 2023 was 141 litres (PUB).

3. Energy security: 

The imperative of diversification and decarbonisation: Due to its near total reliance on imported fuels, primarily natural gas, Singapore's energy supply is susceptible to price fluctuations and supply interruptions.

• Heavy reliance on natural gas: About 95% of Singapore's electricity is generated by natural gas (Energy Market Authority, or EMA). Despite being a cleaner fossil fuel than coal or oil, Singapore is vulnerable to geopolitical risks and changes in the global gas market because of this near-monopoly. About 40% of Singapore's total carbon emissions come from the energy sector, making decarbonisation a huge obstacle to the country's goal of having zero carbon emissions by 2050.

• Challenges of renewables: Singapore has intrinsic limitations despite its high renewable energy ambitions, including a lack of constant strong winds for wind energy and a small land area that restricts the construction of large-scale solar farms. There are major technological obstacles to grid stability when integrating intermittent renewable sources.

Response:

• A multi-pronged energy transition: Singapore is pursuing a comprehensive, multi-pronged approach to enhance energy security and achieve its decarbonisation goals:

• Low-carbon electricity imports: An essential approach to overcoming domestic renewable energy limitations. By 2035, Singapore hopes to import up to 6 GW of low-carbon electricity, which will cover almost one-third of its total electricity demand (EMA). Cross-border initiatives that take advantage of the renewable energy potential of its ASEAN neighbours include agreements to import 1.2 GW from Vietnam, 2 GW from Indonesia, and 1 GW from Cambodia (East Asia Forum, GoBusiness).

• Hydrogen and carbon capture, utilisation, and storage (CCUS): Research and development of hydrogen as a viable low-carbon fuel is being heavily funded, with pilot projects investigating its application in hard-to-abate industrial sectors and power generation. Similar research is being done on the technical and financial feasibility of CCUS devices for capturing and storing pollutants from heavy industries.

• Small modular reactors (SMRs): Investigating the long-term viability of deploying Small Modular Reactors (SMRs) as a renewable energy source in detail. With benefits including modular construction, reduced environmental impact, and improved safety measures, SMRs are a better choice for a country with limited territory.

• Energy efficiency and demand side management: Encouraging broad energy efficiency in homes, businesses, and industries using smart grid technologies, incentive programs, and strict rules (such as the Green Mark program for buildings) to maximise energy use.

• Carbon tax: According to the Ministry of Sustainability and the Environment (MSE), Singapore imposed a carbon tax in 2019 that was gradually increased to S$25 per tonne of emissions in 2024. By 2026–2027, it would rise to S$45 per tonne, with a long-term goal of S$50–80 a tonne by 2030. Businesses are strongly encouraged by this tax to invest in green technologies and lower emissions.

• Future energy fund: The Future Energy Fund was raised by the government to S$10 billion (MOF) in Budget 2025. De-risking pilot projects for innovative low-carbon technologies, investing in new energy infrastructure, and supporting long-term energy transition activities will all be made possible by this fund.

VI. Conclusion of Part 1 

Unquestionably complicated, multi-layered, and interlinked are the issues facing Singapore at SG60, necessitating an all-encompassing and proactive approach that goes beyond conventional policy silos. Singapore is facing a pivotal juncture as it navigates geopolitical challenges, economic changes, and the twin existential constraints of an ageing population and climate change. Its own success model, which is based on constant adaptability and strategic vision, must now adjust to a new paradigm of challenges from both domestic and international sources.

However, ingrained in its history and developed over many years of practical government are a distinct set of arduously cultivated qualities—fundamental traits that have consistently enabled the island nation to outperform its peers. Its future resilience and ongoing significance on the international scene can be greatly enhanced by strategically utilising these qualities. As it forges ahead towards SG100, Part 2 will examine these crucial pillars and examine how Singapore's timeless qualities may be carefully used to not just overcome current challenges but also to re-establish its leadership in ASEAN and Asia.

- End of part 1 -

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