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PM: How to storm-proof S'pore

Singapore must restructure its economy, upgrade its workforce, attract higher value-added activities and push for free trade and investment. -myp
Sophie Hong

Wed, Dec 07, 2011
my paper

Singapore must restructure its economy, upgrade its workforce, attract higher value-added activities and push for free trade and investment with other countries, Prime Minister Lee Hsien Loong said yesterday.

This is to prepare for slower growth here in the wake of crises in Europe and the United States.

Mr Lee said no country is immune to the economic impact, as even China "is clearly slowing down".

He was speaking in Downtown East at the National Delegates' Conference organised by the National Trades Union Congress.

"Our own economy is gradually losing momentum... Some companies have shorter work weeks and temporary layoffs, and the numbers are rising," he said.

The unionised sector is expecting at least 20 per cent more retrenchments this year compared to last year, and the Ministry of Trade and Industry has forecast growth of 1 to 3 per cent next year.

This year's growth is set to be about 5 per cent.

In the decade up to 2009, Singapore's productivity grew by about 1 per cent per year.

Mr Lee described this as positive, but added that it is not good enough as it fell short of the target of 2 to 3 per cent productivity growth per year.

He called this an "ambitious target", as most developed countries have a productivity growth rate of about 1 to 2 per cent per year.

"I am confident that we can do it if we put (in) our full efforts," he said.

Besides external factors, internal factors that will affect growth here include Singapore's size constraints, a more mature economy and a reduced intake of foreign workers, said Mr Lee.

"With this tough environment, we've got to do our best to create jobs to raise incomes, not just this year or next year, but on a sustained basis for the next five, 10, 15 years."

He added that layoffs and shutdowns are unavoidable as the economy restructures itself, as activities that are no longer viable will have to make way for new investment.

If this does not happen, the economy will stagnate and companies will "lose vitality and die off", he said.

He said the tripartite partners - that is, the Government, unions and employers - will pay special attention to low-income and less-skilled workers, and ensure that they benefit from the country's progress.

The Government will build on Workfare schemes to supplement the wages of low-income workers, he said.

Circumstances are making tripartism more important than before, and as workers adapt to changes, they will require support and resources, he said.

But more difficult decisions and trade-offs lie ahead and the only way to navigate them is through close tripartite cooperation.

This includes doing more to help the poor without turning Singapore into a welfare state, and mitigating the widening income gap as the country opens up to more trade and investment.

The thing that "holds everything together is (the) trust" built up over many years between the tripartite partners, said Mr Lee.

"We have high international reputation, especially after the last crisis, and we have a healthy, functioning model of tripartism."


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