Singapore—On Tuesday (May 26), Deputy Prime Minister Heng Swee Keat announced the fourth stimulus package to be released since the coronavirus pandemic began, an additional sum of $S33 billion. This makes for an allocation of almost S$100 billion in total for businesses and households to weather the fallout from the pandemic.
Mr Heng announced the additional stimulus funding on the same day that the Ministry of Trade and Industry adjusted its forecast for the year, announcing that the GDP is expected to contract between four percent and seven percent for 2020, its third downgrade.
Commenting on Facebook on the additional stimulus, The Independent Singapore publisher and businessman Kumaran Pillai pointed out that the country is now facing the most serious recession since Singapore gained independence in 1965, and asked, “The question is, do you think the 4G leaders have what it takes to lead us into the future?”
The government has set aside a cumulative $100B over several supplementary budget allocations to respond to the current…
Mr Pillai pointed out that Singapore’s economy has received a heavy blow “on both the demand and supply side,” with some sectors “completely flattened,” such as aviation and tourism.
He added that a “record number” of bankruptcies may be expected, as well as an unprecedented number of layoffs. And while the amount of the stimulus may appear to be quite large, the total economic fallout from the pandemic still remains to be seen.
In addition to this, Mr Pillai also mentioned the likelihood of a surge in coronavirus cases when the circuit breaker restrictions are lifted next week.
He also called for the business community to innovate through looking into new business models, as well as for the government to partner with small businesses that have adapted with agility to the current situation so that even more new economic models will emerge.
The economic recovery from the pandemic may take as long as two years, which is why innovative economic models are needed. And as welcome as crisis relief packages are, they do not offer lasting solutions.
With all the severity of the challenges ahead of Singapore, especially the economic challenges, the country will need extraordinary leadership to lead it to the future.
This is the second time in a week that Mr Pillai has commented on Singapore’s economic future. After it was announced on May 20 that the Deputy Prime Minister would be making a statement in Parliament regarding further plans to extend assistance to businesses and individuals amid the coronavirus pandemic’s economic fallout, Mr Pillai called for a rethinking of Singapore’s economic model.
In a Facebook post, the businessman outlined the three main points concerning how the country’s economic policy needs to shift because of the damage that Covid-19 has inflicted on it.
First, over-reliance on cheap migrant labour needs to end. Mr Pillai pointed out that improving Singapore’s productivity has been discussed for years but we “have achieved little and not much to show where improvements in productivity is concerned.”
Next, Mr Pillai called for the Government to create a “solid superstructure” that would enable businesses to grow both in South East Asian and global markets, given that local markets “will be lackluster” in the immediate future because of the pandemic.
“We need new growth engines,” he added.
Finally, according to the businessman, financial aid needs to go directly into households, where it’s needed the most, to provide safety amid intense and prolonged economic turbulence. “We are going to see more individuals falling off the economic cliff. We need to give them the safety net so that they can survive the storm ahead of us.” —/TISG
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