Singapore — Addressing the nation on the eve of May Day, Prime Minister Lee Hsien Loong said Singapore must be ready for some aspects of the economy to change completely and some jobs to disappear because of Covid-19.
In his speech, which is usually delivered at a large gathering but which was broadcast for the first time in 60 years because of the pandemic, he appealed to workers and employees to meet halfway amid the widespread economic fallout now and in the coming months.
And while the Government has allotted S$60 billion in order to “save jobs, reduce costs for companies and tide Singaporeans over this crisis”, salary cuts for workers are still likely.
The Prime Minister said: “I encourage both employers and workers to take a longer-term view. Workers must accept wage sacrifices to keep businesses going. And employers must make every effort to keep their workers, and help them through this difficult period. They should not drop workers at the first sign of trouble.”
As employers make the effort to help workers, workers will, in turn, pay them back by helping businesses do well when the economy is on the upswing once more.
This, he said, is for the short-term view. But for the longer term, Mr Lee said that the pandemic may well see the beginning of structural change.
“Significant structural changes to our economy are likely. Some industries will be disrupted permanently. Companies will have to change their business models to survive. Some jobs will simply disappear. Workers in these industries will have to re-skill themselves, to take up jobs in new sectors.”
He gave the specific example of the ease with which people are now working from home and doing online shopping, since the first circuit breaker restrictions on April 7.
The Prime Minister also warned against expecting things to go back to the way they were before the coronavirus outbreak and the restrictions that followed.
“We will not go back to status quo ante, after the circuit breaker ends. And that will mean opportunities in these new ways of doing things.”
He noted that several industries, such as medical services, biotech, food production and delivery and IT, are expanding.
“Even today, many of these firms are seeing stronger demand and hiring more people. We have capabilities in some of these new and growing sectors.”
The Prime Minister’s remarks came just days after the Monetary Authority of Singapore (MAS) warned that the country’s economic growth prospects have become more dire. This means that the country should be prepared to face the worst recession it has experienced in a number of years.
The MAS said salaries may be reduced but added the large fiscal stimulus from the Government means that many jobs will not be cut and that companies need not close down, according to a report in straitstimes.com on April 29.
Gross domestic product (GDP) has been forecast to decrease between one and four per cent.
The MAS said: “There are significant downside risks to Singapore’s growth outlook. The materialisation of any combination of these risks could bring GDP growth below the projected minus 4 to minus 1 per cent range.” /TISG
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