Employers & workers brace for sharp downturn in first half of 2009

SINGAPORE: Singapore’s economy started on a high note in 2008. That was until September, when the downslide began, with economic growth now expected to come in slightly below the government’s earlier forecast of 2.5 per cent.

And the worse is not deemed to be over yet, as employers and workers alike brace themselves for an even sharper economic downturn in the next few months.

Stephen Lee, President of the Singapore National Employers Federation, said: “The storm is coming, we haven’t seen the bottom of the storm yet. How bad it will get? We would like to prepare our members.”

Economists said that as the cause is a financial one, it is tough to predict the downturn’s length and depth.

Heng Chee How, Deputy Secretary-General of NTUC, said: “It is no point trying to guess a number. I think what is more productive is what we (should) do to keep retrenchments and the unemployment rate to as slow a pace as possible, so that if we can avoid, we avoid… if we cannot avoid, we delay… and if we cannot delay, we minimise – that should be the way to do it.”

To help achieve this, the Singapore government in December launched a S$600 million Skills Programme for Upgrading and Resilience (SPUR). Under SPUR, companies with excess manpower have been urged to send their workers for subsidised retraining.

The Workforce Development Agency (WDA) said it wants to see the programme more widely implemented across more sectors in 2009.

Chan Heng Kee, Chief Executive of WDA, said: “Where necessary, we will put in place what we call conversion programmes, because moving from one sector to another is not easy. So we have conversion programmes encompassing the skills needed to move into new sectors.

“Rather than retrenching the worker as the first resort, why not take advantage of the financial support provided by the government so that by the time the upturn comes around, you have a loyal worker who is also better trained, more productive, and can do a higher skilled job for your company.”

Among those targeted for such conversion programmes are displaced mid-career workers.

Chan added: “Even as we help both employers and workers manage the current downturn, I think we are also not losing sight of the future. We are slowly putting in place the building blocks of the continuing education and training system.”

Employers and workers in Singapore will be looking forward to some key announcements in January 2009.

First, the National Wages Council – which is made up of representatives from the government, employers and trade unions – will be meeting in January to re-examine its wage guidelines to ensure that the country remains economically competitive even during these difficult times.

Next, Singapore’s Parliament has brought forward its Budget sitting to January 22, from its usual sitting in February.

In Budget 2009, the labour movement hopes the Finance Minister will announce measures to help workers strengthen job stability while the employers federation is looking at help from the government to lower operational costs.

“Singapore, being a very small open economy will get hit harder than our Asean neighbours,” said Lee. “But Singapore, with its strong balance sheet will be able to (weather) this downturn better than our neighbours.”

For 2009, the Trade and Industry Ministry’s growth forecast for Singapore is in the range of minus one to plus two per cent.

- CNA/yb

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