Singapore’s economy to open up ‘step by step’ after COVID-19 circuit breaker: Prime Minister Lee Hsien Loong on his May Day speech

Enamul Hafiz Latifee compiles,

Restarting Singapore’s economy after the COVID-19 pandemic will not be straightforward and some sectors will need to wait longer to reopen, said Prime Minister Lee Hsien Loong on Thursday, 30 April 2020.

Meanwhile, the country needs to step up testing for the virus, speed up contact tracing and proceed cautiously with safeguards so that infection numbers do not rise again, he added.

 

The Prime Minister made this point in his annual May Day speech to workers, in which he also laid out his strategy for getting Singapore through the immediate crisis and adapting to longer-term structural changes in the economy.

 

Essential services have been kept going, he said, “but the rest of the economy will have to open up step by step and not all at once”. PM Lee said that Singapore will progressively restart its economy after it brings down the number of new COVID-19 cases, but this will “not be straightforward”.

He added: “Some industries will open up earlier than others, and recover sooner… Other sectors will have to wait, especially those which attract crowds, or involve close contact with other people, such as entertainment outlets and large-scale sporting events.”

 

First in line to open up include sectors that are critical to keeping Singapore’s economy going domestically, as well as those that keep the country connected to the world and global supply chains, he said.

 

But all other industries also need to be kept “intact, ready to resume business when conditions allow”.

 

PM Lee added: “This demands close cooperation between companies, workers and the Government.”

 

He noted that tourism and aviation are likely to take much longer to recover than the rest, because international travel will remain restricted as long as COVID-19 poses a global threat.

 

“Air transport is fundamental to Singapore’s role as a global and regional hub. It is a strategic sector. This is why the Government is providing extra support for aviation,” he said.

 

PM Lee highlighted the efforts of the Singapore Airlines Group (SIA), which has helped fly in essential supplies, mounted evacuation flights to bring Singaporeans home and redeployed its cabin crew to serve in such roles as safe distancing ambassadors.

 

But its planes may stay grounded for some time, and as the national carrier faces its “biggest crisis ever”, those in management have taken pay cuts, and its unions and workers have made sacrifices too.

 

“The Government is determined that SIA will see through this crisis,” PM Lee said. “SIA has always flown Singapore’s flag high all over the world, and made us proud. We will spare no effort to enable it to do so again”.

 

Overcoming the COVID-19 Pandemic

In his message on the eve of 1st May when workers are celebrated, PM Lee laid out his strategy to get Singapore through the crisis and adapt to longer-term structural changes in the economy.

 

On the medical front, Singapore has made significant progress but it has more to do as there are many COVID-19 cases in migrant worker dormitories.

 

He thanked them for their contributions to the country and lauded those in essential services for their efforts during this crisis, adding: “All of you have made sacrifices and exceeded the call of duty.”

 

On the economic front, Singapore has felt the full brunt of the downturn. The Government has tapped the country’s reserves to save jobs, reduce costs for companies and tide Singaporeans through the crisis, he said.

 

But businesses still have other costs to bear, and many workers will see reduced pay – either in lost overtime or indirect wage cuts.

PM Lee urged both businesses and workers to take a longer-term view.

 

“Workers must accept wage sacrifices to keep businesses going. And employers must make every effort to keep their workers, and help them through this difficult period,” he said. “They should not drop workers at the first sign of trouble. This way, workers will remember and return the kindness, serve loyally and help their businesses survive. Companies will also be in a better position to rebuild when the economy begins to recover.”

 

Like governments all over the world, Singapore has set aside a large sum, amounting to $60 billion, to keep the economy afloat.

 

But unlike many, it will not have to borrow to do so, as it has its reserves to draw on, PM Lee said.

 

“This crisis is indeed a reminder for us to be prudent and frugal, to build up our reserves in peacetime, so that in truly difficult times, we will have something extra to fall back on.”

 

 

Structural Changes due to COVID-19 Pandemic

The COVID-19 pandemic will leave its mark on the global economy – especially in trade and investments – and this will have major implications for Singapore, the Prime Minister said.

 

The challenge for Singapore will be greater than most, as it is so small and globalised, he added.

 

“However, these are also advantages. Our smallness lets us be nimble. And global connectivity means we can quickly identify new growth areas and move into them.”

 

Singapore has what it takes to succeed, he said, noting that it has gone through economic restructuring more than once, and possesses the resources to support businesses, invest in its workforce and take care of its people.

 

“And we have our tripartite partnership, forged over the decades. Employers, the labour movement, the National Trades Union Congress (NTUC) and the Government work closely together, in good times and bad,” he added. “We are bound by ties of loyalty and trust, the comradeship of past battles fought and won together.”

 

On the global stage, the aftermath of the pandemic will likely see more restrictions on the movement of goods and people, PM Lee said.

 

Countries will strive to rely less on imports for food and essential items, such as medicine and face masks.

 

In Singapore, some industries will be disrupted permanently and some jobs will simply disappear.

 

Companies will have to change their business models to survive, and workers whose jobs no longer exist will have to re-skill and move to new sectors, he added.

 

The Prime Minister noted that during the circuit breaker period, workers learnt to telecommute and work with others virtually, while students got used to online learning. In addition, more people are buying things online and making e-payments.

 

“We will not go back to status quo ante after the circuit breaker ends,” he said. “And that will mean opportunities in these new ways of doing things.”

 

At present, industries such as medical services, biotech, food production and delivery and information technology are growing. Many firms in these sectors are seeing stronger demand and hiring more people, he said.

 

“We have capabilities in some of these new and growing sectors. Other industries will be new to us, and we will have to build up our expertise and workforce.”

 

PM Lee pledged to help companies adapt to this new operating environment and retrain workers for the jobs available.

 

This will be done by scaling up SkillsFuture programmes to train workers on a large scale and find ways to buffer those in the gig economy against economic volatility.

 

NTUC has also set up a Job Council to help train and match displaced workers with new job opportunities.

 

“We will not be able to save every job,” PM Lee said. “But we will look after every worker.”

 

The Prime Minister rounded up his speech by acknowledging that the road to recovery will be long and hard.

 

Singaporeans should be under no illusion that everything will be well once the circuit breaker period ends, or the number of COVID-19 infections declines.

 

“But we are not people who will shrink from the struggle. It took us blood, sweat and tears to get here,” he said, pointing out that the Pioneer and Merdeka Generations braved the odds in moments of crisis and prevailed.

 

COVID-19 – an invisible but formidable enemy – is this generation’s challenge, he said.

 

“It is now our turn to prove that we are worthy of our forebears, and up to the challenge before us. I have every confidence that we will prove more than equal to the task.”