Published April 29, 2009

A case for confidence even with more layoffs ahead

Budget measures, reserves, tripartism help bolster S'pore: Swee Say

By LEE U-WEN

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(SINGAPORE) Festive season or not, many companies did not hold back on retrenching staff until after the Chinese New Year period was over this year, as the growing impact of the global financial crisis forced their hand.

Giving updated figures in his annual May Day message yesterday, labour chief Lim Swee Say said the unionised sector saw layoffs reach as high as 900 workers a week during the Chinese New Year period in February.

But thanks to a series of measures introduced in this year's Budget, the rate has 'dropped noticeably' to an average of less than 300 per week since, 'thus averting a potentially explosive situation of massive retrenchment seen elsewhere'.

Mr Lim, who is also Minister in the Prime Minister's Office, said: 'At a time when corporations worldwide are adopting retrenchment as the first resort, the tripartite partners in Singapore advocate retrenchment as the last resort.'

Singapore has long lauded its tripartism - the close relationship between the government, unions and workers - as a key strength not easily copied by other countries.

Mr Lim cited the guidelines on managing excess manpower issued by the tripartite partners, the launch of the $650 million Skills Programme for Upgrading and Resilience (Spur) scheme and the $4.5 billion Jobs Credit programme as having made 'a real difference between cutting jobs to save costs, as seen in other countries, and cutting costs to save jobs in Singapore'.

As bleak as it may seem, the retrenchments in the first quarter of 2009 are not the only wave but just the first one, he said. 'It is not a question of whether we will see a second wave of retrenchments, but a question of when it will reach the peak, how high it will be, how long it will last and how many more workers will lose their jobs in this next wave.'

With the local economy set to contract by up to 9 per cent this year, compared with the World Bank's global contraction forecast of 1.7 per cent, Mr Lim said Singapore's battle against the downturn 'is far from over'.

'The global economy has yet to hit the bottom,' he said. 'The rebound, when it comes, is not expected to be strong. This means we will not only see negative economic growth during the downturn, but also slower growth when the recovery comes.'

But even though the chips are down, there is no need to be disheartened, said Mr Lim, who reckons there are 'solid reasons' to be confident.

'We are able to tackle this global downturn in our uniquely pro-business and pro-worker way without having to choose between the interests of businesses and workers, because we have built up two critical assets that many other countries do not yet have - our strong national reserves and our strength in tripartism,' he said.

Costs will continue to be cut to save more jobs, and management will continue to lead by example, he said. Most importantly, Singapore has to keep creating growth and jobs to prosper.

'Looking back, because of our decisive move to attract major investments and increase job supply when the economy was doing well, there are still many jobs today for those who are willing to learn and adapt,' he said.

'Looking forward, to ensure there will be more jobs tomorrow, we must keep building new capabilities, upgrading service quality and restructuring businesses, especially at a time of downturn.'