Singaporeans must be prepared for more economic challenges in the year ahead, says PM Lee Hsien Loong
By Justin Ong, Political Correspondent, The Straits Times, 1 May 2022
Singaporeans must be prepared for more economic challenges in the year ahead even as the Government does all it can to cushion the impact of the Russia-Ukraine war, especially on the cost of living, said Prime Minister Lee Hsien Loong on Sunday (May 1).
"The fundamental solution... is to make ourselves more productive, to transform our businesses, to grow our economy, to uplift everyone," he noted. "Then our incomes can go up, and that can more than make up for higher prices of energy and food. Then we can all become better off in real terms."
PM Lee was addressing unionists at the May Day Rally at Downtown East, with some attending the hybrid event virtually.
In his speech, he outlined the Government's measures to alleviate cost-of-living pressures on Singaporeans. These include the $560 million Household Support Package announced at Budget 2022, which comprises U-Save and service and conservancy charges rebates and Community Development Council vouchers to reduce living expenses for nearly all households - with lower- and middle-income households receiving more.
The Monetary Authority of Singapore has also tightened monetary policy to reduce imported inflation, leading to the Singapore dollar appreciating.
Singapore is also taking steps to secure its own food and energy supplies, in the event of these being disrupted by the ongoing Russian invasion of Ukraine, which started on Feb 24.
"All this will help, but we must be prepared for more economic challenges in the year ahead," said PM Lee, pointing to inflation remaining high and central banks in developed countries tightening their monetary policies and raising interest rates.
"Global growth will be weaker, and there may be a recession within the next two years," he warned. "We have to face up to these realities."
Singapore, with its tight integration in the global economy and small size, will always be a price taker when it comes to world markets, said PM Lee. "We have very little bargaining power. If the prices go up, our prices go up. If supplies are short, we are squeezed. We cannot avoid these global headwinds."
Noting that Singapore imports nearly all its supplies of energy, he said that the doubling of oil prices in recent months has come at a cost - to households, businesses and the Government - of around $8 billion, as estimated by the Ministry of Trade and Industry.
He added: "There are limits to what Singapore can do to influence broader international trends. We will push back against deglobalisation. We will speak up to encourage the US and China to constructively engage each other.
"But ultimately, all these matters depend on the major powers themselves, and the relations between them, and how the war in Ukraine unfolds."
Said PM Lee: "We have speaking rights, but we are a small voice. Singapore has to take the world as it is, and develop a strategy that works for us in this troubled environment."
Turning inwards, relying heaving on domestic markets and producing more things onshore is a viable strategy for larger countries - but this is "not a choice open to Singapore", he said.
“Our strategy can only be one - and that is to stay open, to make our economy stronger, more resilient, and to keep on seizing opportunities for growth, developing new capabilities and becoming a more competitive economy,” said the Prime Minister.
"Because if we do that, then despite the uncertain climate, despite the pressures against globalisation, investors will still find it worthwhile to put their projects in Singapore, our exports will still find foreign markets, and we can still earn a living for ourselves in the world."
PAP 4G team to launch exercise on road map for Singapore, refresh social compact: Lawrence Wong
By Goh Yan Han, Political Correspondent, The Straits Times, 1 May 2022
The ruling party's next generation of leaders will soon draw up a road map for Singapore for the next decade and beyond, said Finance Minister Lawrence Wong, the team's chosen leader, on Sunday (May 1).
The team will engage stakeholders from different fields - unions and the people and private sector - to hear thoughts on the economy, healthcare, housing, education and other areas, said Mr Wong.
He was speaking to unionists at the May Day Rally held at Downtown East. There were about 900 in the audience and another 1,000 attending online.
"The 4G team and I will lead an exercise to refresh our social compact... We will consider what we need to do differently, but also affirm what is being done well, and how we can do it even better," he said.
Mr Wong was announced as the leader of the People's Action Party's (PAP) fourth-generation (4G) team on April 14, paving the way for him to be Singapore's next prime minister.
On Sunday, he said that the exercise would not be just about what the Government can do for the people, but also, as Singapore has learnt during the pandemic, what everyone can do for one another.
"And how we can all, collectively, contribute towards building a better society that embodies the values we stand for," said Mr Wong.
This road map will be a major undertaking of the 4G team and will be formally launched soon, he noted.
Mr Wong said he announced these plans on Sunday to seek the labour movement's full participation and support for the exercise, noting that the movement and tripartism have been the bedrock of Singapore's success over the decades.
He noted that there is no ready blueprint for Singapore's future, but he would like to see a fairer, greener and more inclusive Singapore - also the key themes of his maiden Budget that he delivered in February.
Mr Wong said: "A home where everyone is accepted and valued, and treated equally and with respect, no matter their background or station in life. A home where everyone can live with dignity, and flourish in their own way and at their own pace, regardless of their starting points.
"Now going from this ideal to reality will require more than my personal hopes; it's about what we can and must do as a people together."
During his speech, he also noted the importance of tripartism and Singapore's distinctive model of it - where unions partner the Government and employers, and the tripartite partners became co-drivers of the country's development.
He said: "We may have differing interests from time to time, but we do not clash and grind against each other in a zero-sum game.
"Instead, we learn to accommodate, to give and take, and find common ground. And in the process, we build closer relationships with one another, we strengthen trust and we move forward together."
Mr Wong said that though many did not live through the founding years of tripartism, they are all direct beneficiaries of it.
"My own life story illustrates this," he said, adding that he grew up in an ordinary heartland family in Marine Parade, and that the slogan "every school is a good school" was not just a slogan for him, but also a real-life experience.
Mr Wong attended a PAP Community Foundation kindergarten, Haig Boys' Primary School, Tanjong Katong Secondary School and Victoria Junior College - all schools near his home.
"Our pioneers have enabled my generation and I to do better than our parents. Likewise, for me and my 4G team, we want to ensure the same for the next generation," he said.
While there are challenges and volatility ahead both globally and domestically, the experience of the last two years gives him confidence, said Mr Wong.
Despite lacking the resources of larger countries, Singapore has been able to adapt and adjust quickly amid the Covid-19 pandemic.
He added that he had recently attended a dialogue with young people looking towards SG100.
"By 2040, I will be close to 70 years old. Now as I said before, I don't know if the PAP will win the next GE, let alone if I will still be in office in 2040," he said.
Noting that he had committed all 25 years of his working life to the public service, he said: "I give you my word: Whatever lies ahead, I will give every ounce of my strength to this movement, together with my comrades in the 4G team."
Earlier on in the rally, Prime Minister Lee Hsien Loong had asked the unionists to give Mr Wong and his team their fullest support.
PM Lee said: "I told him (he) will be in the hot seat. He is taking on a very heavy responsibility. He will have to lead Singapore in a very different and uncertain world.
"He will need the full support of his Cabinet colleagues and also must be able to rely on all our brothers and sisters to work with him and his team, and to continue partnering them, to take Singapore forward."
Singapore must build on post-pandemic momentum to transform economy, says PM Lee
By Goh Yan Han, Political Correspondent, The Straits Times, 1 May 2022
The Republic must build on the momentum from the Covid-19 pandemic and continue to transform the economy, said Prime Minister Lee Hsien Loong on Sunday (May 1) at the May Day Rally.
Singapore has to keep its eyes open for new opportunities, press on with transformation efforts and strengthen its resilience for the future, said PM Lee, addressing about 900 unionists gathered at Downtown East and another 1,000 attending virtually.
He added that besides contributing ideas, the labour movement has been deeply involved in transforming and upgrading the economy, and improving the productivity of businesses and workers.
Economic transformation does not just depend on having the right national policies, he said. To make it happen, every business and every worker needs to make the effort in business transformation and upskilling.
"The two of them must go hand in hand, so that when new jobs are created, workers are equipped to take them up. When there is technology and progress, workers are not displaced," said PM Lee.
"We have been pushing hard - digitalisation, automation, upskilling and training - every May Day we talk about it for years now. But I am glad we did that, because when the pandemic forced the pace, our businesses and workers were not caught by surprise."
In his speech, he gave several examples of companies pivoting and adapting to seize new opportunities.
One of them is precision engineering firm Certact Engineering, whose main business used to be producing metal parts for semiconductor manufacturers.
Its managing director Ellis Eng said that two years ago, the company already felt it was losing market competitiveness and needed to pivot.
It saw an opportunity to grow its small plastics engineering arm - which was seeing high demand amid the pandemic, particularly to manufacture plastic parts for medical equipment such as ventilators - but it needed help to make this major move, said PM Lee.
Certact then decided to join the National Trades Union Congress' Company Training Committee initiative and worked closely with the Advanced Manufacturing Employees' Union to map out the changes before taking the plunge.
PM Lee said: "Business has since doubled, and the company continues to expand and employ more staff. I hope more companies will follow Certact's example."
Another example was recycling and waste management company Wah & Hua, which struggled to hire foreign workers during the pandemic.
Its chief executive Melissa Tan then decided to rebrand the sector by investing in smart garbage trucks from Germany that have solar mats on the roof and dust filters to clean the air. These efforts were part of the company's operation and technology road map developed with NTUC.
"The trucks and the devices are operated by truck captains - it's a small change of title, but a meaningful gesture to recognise their skills, and instil pride in themselves," said PM Lee.
The third example was traditional Chinese medicine provider Oriental Remedies Group, which wanted to attract and retain more female employees in a traditionally male-dominated business.
Its chief executive Beatrice Liu partnered NTUC's small and medium-sized enterprises arm, U SME, to implement workplace policies to reduce gender discrimination and harassment, made flexible working hours the default arrangement, and redesigned job scopes to support working mothers.
Today, 70 per cent of the company's workforce is female, and its revenues have grown almost seven times over the last two years, noted PM Lee.
The three examples demonstrate different ways to realise business transformation, he added.
"Companies with worker-centric practices will do well in the future labour market," PM Lee said.
"We need to maximise the potential of our domestic labour force. Our resident population is hardly growing, our workforce is ageing, the economy is generating more jobs than we have workers for... Labour will be a permanent constraint for Singapore," he added.
The upcoming tripartite guidelines on flexible work arrangements will help Singapore respond to these trends, said PM Lee.
He added: "If we can implement flexible arrangements well, then more people, especially mothers and caregivers, will be able to continue working, or to come back to work after their babies are a bit older, and to achieve work-life harmony.
"We should see other benefits also, like less peak-hour travel and congestion. And maybe - a little boost to our total fertility rate."
Singapore must stay open, strengthen economy, amid challenge posed by Ukraine war: PM Lee
By Sue-Ann Tan, Business Correspondent, The Straits Times, 1 May 2022
Singapore's strategy must be to stay open and make its economy stronger and more resilient, as the Russia-Ukraine conflict affects global trade and the cost of living, said Prime Minister Lee Hsien Loong on Sunday (May 1).
Russia's attack on Ukraine has also undermined the global order, which is bad especially for small states like Singapore, whose security and existence depend on the international rule of law, PM Lee said at the May Day rally .
As a result of global headwinds driving up energy prices, Singapore will take a hit of $8 billion a year, he added, citing estimates by the Ministry of Trade and Industry.
"That is 1.5 per cent of our GDP," PM Lee said. "That means we in Singapore have become collectively $8 billion poorer off per year, and there is no escape from this."
This is because Singapore imports nearly all its supplies of energy, except for the solar electricity that it generates itself, PM Lee said.
For example, when the oil price was around US$50 per barrel, Singapore's annual imports of crude oil and natural gas cost roughly $30 billion per year.
But when oil prices double to US$100 per barrel, as they have done in the last 16 months, Singapore has to pay double too, which means an extra $30 billion per year.
"We can recover part of this because some of it is transformed, we refine the oil, we make petrochemicals, we sell it overseas, and we charge more," he said.
"But the rest we consume, we turn on the lights, we turn on the air-conditioner, we drive our cars, we have to bear that cost - Singapore households, businesses and the Government."
The war has worsened global inflation as Russia is a major exporter of oil and gas, and Ukraine is among the world's largest exporters of cereal crops and vegetable oils, he noted.
PM Lee added that the stakes in the crisis are also rising, as the war continues without a good outcome in sight.
"The US now says that its aim is to weaken Russia's military capabilities, to prevent Moscow from invading other countries in future," he said.
"On the other side, Russia now sees this not just as a fight in Ukraine, but a struggle against many Western countries... If the war spreads beyond Ukraine's borders, or unconventional weapons are used, no one will be able to control how the situation unfolds."
He added that even if a ceasefire can be negotiated, peace will still remain elusive.
"Most fundamentally, Russia's attack on Ukraine has undermined the global order: the basic rules and norms for how all countries, big or small, interact properly with one another," he said.
It is also a flagrant violation of the United Nations Charter, he noted, saying this is especially bad for small nations.
"That is why Singapore has taken a strong stand, condemned the attack and imposed targeted sanctions against Russia," he said.
This ongoing conflict has also made it very difficult, if not impossible, for countries to pursue win-win cooperation, whether at the UN, Group of 20 or Asia-Pacific Economic Cooperation levels, he added.
"In particular, it will further complicate US-China relations, which were already strained. In the Asia-Pacific, jostling between the US and China will result in a less stable region."
This will also mean that globally, countries will be unable to make progress on many complex and urgent problems affecting all nations, such as the pandemic and climate change, he said.
Economically, the war will also affect the multilateral trading system, further pushing the trend of countries restricting trade and investments with other countries that they no longer trusted.
"Countries talked about 're-shoring' supply chains to boost self-sufficiency, or 'friend-shoring' to work only with trusted friends and allies. Now, with the war in Ukraine, these trends are going to be pushed even further," he said.
"Singapore's economy depends heavily on international trade and investment. If countries no longer accept the rules of free trade, that makes it harder for us to continue to attract investments, expand our export markets, grow our economy and earn our keep in the world."
The Government has given out support packages and the Monetary Authority of Singapore has tightened monetary policy, but inflation will remain high and global growth weaker, he added.
"The fundamental solution is to make ourselves more productive, transform our businesses and grow our economy to uplift everyone," he said.
"Then our incomes can go up and more than make up for the higher prices of energy and food. Then we can all become better off in real terms."
Internationally, Singapore will push back against deglobalisation, and speak up to encourage constructive engagement between the United States and China.
But ultimately, it depends on the major powers, he said.
"Our strategy can only be one - and that is to stay open, to make our economy stronger, more resilient, and to keep on seizing opportunities for growth, developing new capabilities and becoming a more competitive economy," he added.
"Because if we do that, then despite the uncertain climate, despite the pressures against globalisation, investors will still find it worthwhile to put their projects in Singapore, our exports will still find foreign markets, and we can still earn a living for ourselves in the world."
Amid a challenging external environment, economic success alone is not enough, PM Lee said, as he underlined the need for society to stay cohesive.
"If Singaporeans are not strong and united, if we allow ourselves to become split and divided, we will be done for," he said.
Tripartite model must always be stabilising force for Singapore: PM Lee
By Tham Yuen-C, Senior Political Correspondent, The Straits Times, 1 May 2022
The labour movement worked with the Government and employers to provide vital support to workers and save jobs during the worst days of the Covid-19 pandemic, said Prime Minister Lee Hsien Loong at the May Day Rally on Sunday (May 1), as he stressed that the three-way partnership must always be a stabilising and anchoring force for Singapore.
This tripartism is the result of Singapore's long history of collaborative trade unionism, and the deep trust that has been forged through successive crises, he noted.
He said: "It is our uniquely Singaporean way of conducting labour relations. Where Government, employers and unions are close partners, working together for a common cause, coming up with win-win solutions across many different issues over many decades.
He added: "We must continually reaffirm the bonds, and sustain them from one generation to the next."
His remarks come amid renewed pledges by the National Trades Union Congress and the Government to renew the compact with workers.
Speaking to a packed hall of unionists, workers, employers and politicians at Downtown East, PM Lee said the tripartite partnership has made big contributions to both Singapore's economy and cohesion.
He cited several major policy changes that have involved tripartite partnerships.
The Progressive Wage Model, for instance, was proposed and developed by the labour movement, and the industry wage and skills ladder that sets out the minimum basic wages is now being expanded to cover more sectors and more lower-wage workers, he said.
The new points-based Complementarity Assessment Framework for approving employment passes also received valuable input from the labour movement, and will ensure that foreign professionals complement the local workforce, and local professionals, managers, executives and technicians can continue to compete fairly, he added.
"It will help us to stay open to talent and skills from the world, and thus create more opportunities for Singaporeans," he said.
Meanwhile, the labour movement also contributed to the long-term road map to raise the retirement and re-employment ages, and increase Central Provident Fund contribution rates for older workers, which will support those who want to continue working and save more for retirement, he added.
PM Lee said Singapore has been pushing hard for digitalisation, automation, upskilling and training for many years, and this is why businesses and workers were not caught by surprise when the pandemic forced the changes upon the world.
"Even while the pandemic was raging, quite a few businesses were doing alright. That is why although some workers suffered pay cuts, overall, and after the safe management measures and circuit breaker, wages have increased and household incomes have risen in these past two years," he added.
He said that instances of unions working with management of companies to transform businesses do not happen in many places.
"This happens in very few countries, only in Singapore - and only thanks to the NTUC. This is tripartism in practice - a huge competitive advantage for Singapore," he added.
"I deeply appreciate the many contributions of the labour movement. It represents the interests of a broad range of workers, beyond the traditional rank and file. It helps bring Singaporeans together, so that people know they are not alone, and no one is left behind as our economy progresses."
PM Lee said that in Singapore, unions are good for business and businesses are good to unions too. He urged companies to nurture the partnership and encouraged more workers to join the labour movement, adding that this is "our best strategy to continue progressing together".
Agreeing with this sentiment, Singapore National Employers Federation president Robert Yap described tripartism as Singapore's "secret weapon".
"It is not by chance that we are like that, actually. There is a lot of trust that has been built, a lot of socialising in the way for us to come up with the right policy decision so that we support each other's ideas, so that it is a win-win for everybody," he said.
"It is not the adversarial relationship (where) I win and then you lose."
NTUC aims to support 1,000 firms through training, transformation grant: Ng Chee Meng
By Justin Ong, Political Correspondent, The Straits Times, 1 May 2022
Singapore's labour movement aims to support 1,000 companies over the next four years through a $70 million grant to raise productivity, redesign jobs and upskill workers, said National Trades Union Congress (NTUC) secretary-general Ng Chee Meng on Sunday (May 1).
From August, NTUC's Employment and Employability Institute will start processing applications from employers who qualify for the grant, which was first announced during the Budget debates in March.
To do so, they must have set out concrete plans to transform their workforce, with company training committees (CTCs) to help implement these plans.
CTCs comprise representatives from a company's management as well as union leaders. Their job is to review the firm's current training plans, identify skill gaps, plan for reskilling and career progression for their workers, and develop and implement new training programmes.
In a May Day Rally speech delivered at Downtown East and streamed virtually, Mr Ng described CTCs as key to NTUC's redoubling of efforts to upskill workers amid uncertainties.
When NTUC introduced the CTC model in 2019, it said it aimed to help around 330,000 workers. There are currently more than 900 CTCs and the number is still growing, said Mr Ng.
"CTCs are really like a baby growing up, now somewhat in form, but needing much more nurturing to grow into full fruition," said the labour chief.
The $70 million grant - part of $100 million set aside by the Government to help companies implement concrete training and transformation programmes - aims to lead to better work prospects and, in turn, better wages for workers, Mr Ng added.
For businesses, this means enhanced productivity and innovation, and the ability to attract better talent more effectively.
To illustrate the impact of CTCs, Mr Ng gave an example of how utility supplier SP Group and the Union of Power and Gas Employees provided 800,000 hours of training with 200 workers undergoing skills upgrading.
One worker, Mr Muhammad Yazid, joined SP as a storekeeper in 2013 and last year, was sponsored by the company for a diploma in supply chain and logistics. Mr Yazid is now a warehouse officer supervising a team of six - a higher-value role earning him a better wage.
In his speech, Mr Ng said that the NTUC will continue to keep the prices of necessities affordable amid worries of higher costs of living. He said that some 2.4 million NTUC members and NTUC Link members will enjoy 10 per cent savings when they buy food and drinks at Kopitiam foodcourt and coffee shop outlets by the end of the year.
Concluding his speech, Mr Ng reiterated the labour movement's purpose of improving the lives of workers and knowing the worries of the new generation - particularly in underserved segments.
"Together with the Government, we must strengthen tripartism as a uniquely Singaporean competitive advantage. As we saw in Covid-19, this strength of tripartitism afforded us the wherewithal to respond swiftly to take care of workers," he said.
He added that NTUC would strengthen its symbiotic relationship with the ruling People's Action Party (PAP).
"Each generation of PAP leadership has taken pains to know NTUC's needs better, and we will likewise give the PAP the assurance that NTUC will stand shoulder to shoulder with the PAP leadership," said Mr Ng.
He recounted how he had congratulated Finance Minister Lawrence Wong upon his endorsement last month as leader of the PAP's fourth-generation team, making him the de facto successor to Prime Minister Lee Hsien Loong.
Mr Ng said he reminded Mr Wong of the heavy responsibility that now lay on his shoulders. "But in the same breath, I told him that as secretary-general of NTUC, we will give him the fullest of support - for the success of the PAP government, and for our workers."
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