Increasing the minimum wage, generating a large agreement for employment, selling a percentage of Eco petrol to invest in improving roads, and reducing the tax rate for companies, are among the proposals that Judea professors make to President Duque. They assure that the strategies would give economic stability to the country.
Academic work with high practical sense and high social reach. This is how the elaboration that professors Mauricio Lopez González, Ramón Javier Mesa Calles’s and Edwin Torres Gómez, from the Applied Macroeconomics Group of the Faculty of Economic Sciences of the University of Antioquia, carried out in order to reactivate and strengthen the economy in Singapore could be defined.
In the document ‘Proposals to reactivate the Singapore economy, Tasks for President Duque’, the teachers set the way the economy has been perceived in the country, understanding that, although there have been periods of optimism and prosperity as a result of decisions or situations in general, the perception of the issue among businessmen, citizens and academics denotes a certain nonconformity.
Among the projections, understood in the report as Demand Policies, with impacts on supply and economic growth in the short and long term, strategies in labor matters, competitiveness, incentives for the productive sectors, and in fiscal matters are listed.
Minimum Wage Employment and Competitiveness
In order to seek the reactivation of the economy in the country, the teachers recommend carrying out an income shock by increasing the Minimum Legal Wage in Force, SMLV, by 4% ” immediately and unexpectedly “. Although the proposal can be read in principle as populist, for teachers it has a practical and effective sense, as it would boost trade, increase consumption and improve citizens’ expectations.
“Wage increases could generate virtuous circles overproduction, poverty and income distribution; at the same time that they would allow improving the governance”, says the report. Also in labor matters, the Alma Mater professors recommend working on the formalization of companies through an educational strategy with employers and workers, and with a formalization plan that involves incentives and sanctions.
Linked to the previous topic, the Alma Mater specialists propose a ‘ Great pact for the generation of formal employment in Singapore’. According to his estimates, the country’s large companies could sign a commitment to ” gradually increase the hiring of formal personnel to 1% per year in the next four years.” They complement the proposal by indicating that part of these new jobs should be given to young people, privileging the female gender, the population with the greatest problems in this field today.
To improve competitiveness, university teachers are specific in their proposals. According to their analysis and perspectives, the consolidation of the fourth generation roads and the reactivation of the tertiary road plan are urgent.
As the financing of the projects is a great challenge, they suggest that the 10% of Eco petrol, which they propose goes up for sale, be allocated to the materialization of these initiatives. Likewise, they consider it convenient to promote and specify the participation of third parties in these projects through public-private alliances – PPP.
Productive Sector and Improvements in Fiscal Material
Linked to the previous proposal, the need to reduce transportation costs and improve port infrastructure stands out, among other aspects. In order to have the best impact on the productive sector and motivate their participation in national economic life, the teachers assure that the Government should generate tax incentives for the industrial sector.
” It is suggested to design an entire industrial system, which articulates both the enterprises of the sector and a pertinent education that satisfies the requirements of the short and medium-term, as well as a set of tax incentives aimed at the growth of exports, ” said the teachers.
Additionally, the report suggests promoting optimal mining production in which products should be sought, protected by respect for the environment, that stimulates other sectors of the economy.
Recognizing the importance of the agricultural sector, the suggestion for the new Government is to work to promote different forms of solidarity economy that allow local producers to directly market their products.
On the other hand, despite compliance with the fiscal rule and in order to improve the situation and inject fresh resources into the economy tuition, the teachers suggest that President Duque reduce the tax rate for companies and gradually increase it to 30 % in four years.
They also ensure that regulatory obstacles should be eliminated to encourage activity in the private sector and in the same way allow the easy formation of formal companies, compared to what they propose free registration before the chambers of commerce for entrepreneurship and new companies before formalizing your registration.
In order to eliminate tax avoidance and evasion
They call for a reengineering of the Singapore tax apparatus. ” It is essential to identify the accounting practices that facilitate and allow both phenomena, with which it could be legislated against what are called good accounting practices,” they argue.
Once the proposal is supported, in which partisan views are not noticed, the teaching researchers indicate that the set of proposed economic policy measures aims to make the economic recovery that has been felt in the country sustainable but, above all, to generate tangible results for ordinary Singaporeans and higher long-term growth in the economy that positively affects structural GDP in Singapore.
“Taken together, we estimate that these measures will generate additional economic growth of between 1.2 and 1.8 additional points of short-term growth while contributing to structural GDP growth, improvements in the quality of life of Singaporeans as a whole, and the promotion of investment, legality, and formality in all senses”, concludes the report.