(May 1): Singapore can only relax its partial lockdown measures and progressively restart its economy after the city-state brings down the number of new coronavirus cases, according to Prime Minister Lee Hsien Loong, who cautioned that things won’t ever get back to what they were before.
Lee warned “significant structural changes” to the economy are likely even after the virus abates, with some industries disrupted permanently, companies having to change their business models to survive and some jobs simply disappearing. Many workers will have to accept pay cuts so their companies can survive, he said.
When Singapore does reopen, it won’t happen all at once, Lee said. Rather, it will reopen step by step, with critical industries and those connected to global supply chains going first. Places that draw crowds, such as entertainment outlets and large-scale sporting events, will have to wait.
“The road to recovery will be long and hard,” Lee said in his annual speech to mark May Day, also known as Labor Day or International Workers’ Day. “We should be under no illusion that all will be well, the moment the circuit breaker period ends or the number of infections comes down.”
Singapore is seeking to arrest a surge in coronavirus infections at migrant worker dormitories that has propelled the island nation to having the highest number of reported cases in Asia outside of China and India. The prime minister said the country is “doing everything we can” for the migrant group’s health and welfare, and Singapore has expanded testing and treatment facilities.
After keeping cinemas and bars open for much of February and March, the government imposed restrictive so-called ‘circuit-breaker’ measures that have been extended until June 1. Schools have shut, face masks became mandatory and only essential services are operating.
While hundreds of cases are still discovered daily among dorm-based workers, Singapore has slowed new infections among locals. As of Thursday at noon, the authorities confirmed an additional 528 cases of COVID-19 infections in Singapore, bringing the total to more than 16,000. Just six of those new cases came from Singapore citizens and permanent residents.
Lee said Singapore has “made significant progress, but we have more to do.”
Long-term view
The leader encouraged employers and workers to adopt a long-term view of the situation. Workers must accept wage cuts to keep businesses going while employers must try their best to keep their staff and help them through this period without dropping them “at the first sign of trouble,” he said.
Lee said the economic world that emerges from the virus will be different than the one before. Movement of goods and people will be less free, while countries will strive to rely less on imports for food and essential items like medicines and face masks. This will have “major implications” for global trade and investments, as well as trade-reliant Singapore.
With the onset of the pandemic since the start of this year, first-quarter employment in Singapore, excluding foreign domestic workers, registered its sharpest quarterly contraction since the 2003 SARS outbreak, according to government estimates this week. The unemployment rate meanwhile climbed to 2.4% in the first three months of the year, its highest level since the third quarter of 2009.
“As an open economy, Singapore has felt the full brunt of this downturn,” Lee said. “Trade and investment, our lifeblood, have been disrupted. Without help, good companies, big and small, will go out of business, and many workers will lose their jobs.”
The government has pledged more than $60 billion in fiscal support to support the economy, and is drawing on its reserves for the first time since 2009 for this purpose. In an effort to help workers keep their jobs and enable businesses to resume operations quickly when measures are lifted, the government has announced relief measures including wage support for businesses, freezing of government fees and waiving foreign worker levies.
See Covid-19 solidarity budget stories here.
The country’s gross domestic product is forecast to contract as much as 4% this year, but the slump could turn out be even more severe than that, Trade and Industry Minister Chan Chun Sing said last week. Wages will take a bigger hit than jobs as businesses cut costs, the Monetary Authority of Singapore said Tuesday.
Singapore Airlines
With air transport fundamental to Singapore’s role as a global and regional hub, Lee said the government is “determined” that Singapore Airlines will see through this crisis.
Singapore Airlines is reliant on international routes and as such its recovery will be tied not just to how quickly Singapore can reopen, but also the countries it flies to. Lee vowed to “spare no effort” to restore the national carrier to its pre-virus days.
See also: Singapore Airlines to raise $15 bil via rights issue of new shares, mandatory convertible bonds
