Slowdown could stretch to 2009; Singaporeans should be prepared, says PM Lee
IT WAS, by all accounts, a stellar first quarter economic performance by Singapore — job creation was at a high while flash growth estimates of 7.2 per cent beat expectations.
However, rather than set the stage for another year of expansion, the Prime Minister yesterday delivered the Government's most bearish outlook thus far.
Despite the "good" first quarter expansion, Mr Lee Hsien Loong did not once hint at exceeding the full-year growth forecast of 4 to 6 per cent. Instead, he warned Singaporeans to "prepare ourselves" for a slowdown that "may last until next year".
Speaking at the May Day Rally yesterday, he reiterated the impact of a double whammy of economic uncertainty and rising costs of living on the Republic, points he had raised in his May Day message a day earlier.
"So far, Singapore has been all right. But looking forward, a lot will depend on the US and global economy," he said (see sidebar).
While the construction, marine engineering and port sectors "would be okay", he said, other sectors such as finance, tourism and information technology could be "seriously affected" by the impending recession in the United States.
"It will not be even but there will be impact," said the Prime Minister. "This is one major uncertainty affecting our economy."
Urging employers and workers to ensure that "any built-in wage increases are sustainable", Mr Lee said: "If the companies are still doing well, reward the workers with higher variable bonuses. Keep it flexible; just in case things turn wrong, you don't have to disappoint the workers and take back something which has already been given."
On its part, the Government has been "focused" on the welfare of low-wage workers, said Mr Lee, who revealed that the National Trades Union Congress (NTUC) central committee were "very seized" by the plight of such workers in a recent closed door, "no-holds-barred" dialogue.
"For two hours, we spoke about nothing else except low-income workers," said Mr Lee, adding that there are "no shortcuts" — for example, legislating minimum wage or "shutting out" imported labour — to a common problem facing countries around the world.
While challenges lie ahead, Mr Lee was confident of Singapore's approach: Building tripartite relationships, educating and training Singaporeans, helping industries innovate and assisting needy Singaporeans through a social safety net. "Our approach is working, so we must persevere," he added.
On top of the Workfare Income Supplement scheme and the one-off Growth Dividends, the Government, and the NTUC, have been investing in continuing education and training, including efforts in job recreation, skills upgrading and getting contract workers on board the Central Provident Fund system.
As inflation sets in and prices of daily necessities surge, NTUC has also given out discount vouchers to low-income households, said Mr Lee, adding that the Government would continue to work on helping this group of Singaporeans "patiently".
Stressing that it was vital that the Government not only "do more but do it right", he added: "Don't go for wayang (for show) and grandstanding, issuing statements but not being accountable for results. Show the results."
Many unionists admitted to Today that workers were "very concerned" about how the Singapore economy would fare in the months ahead.
Still, Mr Jeffery Fung, 40, a member of the Singapore Airport Terminal Services Workers Union, said it was comforting to know that measures were in place to mitigate the impact of the impending economic slowdown.
Mr Mariappan, a 54-year-old technical
engineer with Jurong Shipyard, felt that unions ought to lobby harder for workers to get a pay rise, in order to cope with the rising cost of living. Still, the vice-chairman of the Shipbuilding and Marine Engineering Employees' Union conceded: "It would be more difficult given the slowdown, but if the company is doing well, why not?"
Mr Lee, however, stressed that the challenge of helping low-wage earners must be seen in its proper context, as the "majority of Singaporeans are doing well".
Said the Prime Minister: "Household
incomes have increased across the board. The unemployment rate is very low ... and the employment rate is at a record high. We've never had so many Singaporeans working ever before, in spite of all the foreign workers here."
He added: "In fact, I would say this: We have the foreign workers here, and that's why our economy has grown, that's why the companies are here. That's why Singaporeans have jobs in such big numbers."
Dwelling on some Singaporeans' resistance towards the influx of foreign workers in the Mandarin portion of his speech, Mr Lee stressed that the country was facing a manpower shortage, and "not that we have too many workers". For instance, the two integrated resorts are expected to create an additional 20,000 jobs.
Citing measures such as the foreign worker levy and limits on the proportion of foreign workers companies can hire, Mr Lee said he hoped that Singaporeans would "look at the contributions of foreign workers objectively".
He added: "They are not here to steal our jobs but to help us enlarge the economic pie."
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