Last week, Singapore announced its budget allocation for 2020. The allocation highlighted the Southeast Asian state’s continued efforts to manage its security challenges amid wider issues, including a slowing economy and an uncertain geopolitical environment.
As I have noted before in these pages, Singapore has consistently spent significant amounts on its defense and possesses one of the most capable and modern militaries in the region, both because of the vulnerability it perceives as a small city-state as well as well as its economic success, which affords it the resources to do so. Yet at the same time, a series of trends, including occasional economic challenges and increasing domestic scrutiny over the amount of defense spending have led officials to factor these considerations into how the country allocates and manages defense spending.
Last week, Singapore’s defense policy was in the spotlight again with the announcement of the country’s new defense budget. As part of its broader budget, the Singapore government announced that it was set to spend 15.09 billion Singapore dollars ($10.77 billion) on defense for 2020.
The proposed defense budget constitutes a 2.4 percent decline relative to the original 2019 defense appropriation. While such reductions are not uncommon – for instance, the 2017 budget had initially cast defense as one of four ministries where a two percent downward adjustment would be phased in over several years – such reductions are nonetheless significant considering the Singapore government’s traditional insistence on robustly investing in its defense capabilities.
More broadly, the decline will be seen as further evidence of increased nervousness about the country’s economy. A range of factors in 2019, including a sluggish global economy and U.S.-China trade war, had led the Singapore economy to slow, and this has only been intensified by rising concerns about the economic impact of the coronavirus (Covid-19) on the country in early 2020. In his budget speech delivered on February 18, Singapore Finance Minister Heng Swee Keat said the Singapore economy had grown by just 0.7 percent in 2019.
To be sure, the Singapore government has been eager to demonstrate that any budget decline does not mean that it is being less vigilant about its security. Indeed, security was a prominent theme in the budget speech, with Heng flagging it as one of the three major long-term challenges for the country along with fiscal sustainability and climate change and announcements including $1 billion being set aside for the next three years to boost cyber and data security capabilities. Moreover, as with previous years, only a closer look at how details play out – whether it be the revised budget numbers for 2020 and effects on individual line items – will truly reveal how this affects Singapore’s defense capabilities more specifically.
Nonetheless, the initial budget numbers issued last week offer a key indication of how Singapore’s broader domestic and foreign policy environment is affecting its security thinking and practice. As such, this development, along with other signals, will continue to be significant in assessing the mix of continuity and change in this regard.