Job losses in recession—hit Singapore could match levels of previous downturns
Channel NewsAsia
Channel NewsAsia - Tuesday, January 20
SINGAPORE: Acting Manpower Minister Gan Kim Yong has said the unemployment rate due to the current recession in Singapore could reach the levels recorded during the Asian financial crisis in 1998 and the economic downturn in 2001.
And, with the US and European economies likely to recover only in the second half of this year, Trade and Industry Minister Lim Hng Kiang warned that recovery will be a slow process.
Both ministers laid out the jobs situation in Singapore in Parliament on Monday.
Mr Gan said based on preliminary numbers, some 8,100 workers were either laid off or facing retrenchments in the fourth quarter of last year and over the next few months.
Already, some 7,400 workers lost their jobs in the first three quarters of last year, two thirds of whom are locals.
Mr Gan said: "Close to 30,000 workers were retrenched in 1998 due to the Asian financial crisis, and about 26,000 workers were retrenched during the economic downturn in 2001. If our economy were to contract sharply this year, it is possible that retrenchments could reach these levels seen in previous recessions."
The industries that may be most affected by job losses are manufacturing, tourism, transport and wholesale trade as these sectors are most exposed to the external economic environment, said Mr Lim.
He said consumer demand in Singapore’s key exports markets such as the US and Europe is expected to remain weak in 2009. As such, the manufacturing sector in Singapore will continue to face a slowdown.
The financial services sector will also remain weak.
The silver lining is that more than 30,000 new jobs will be available in growth sectors such as construction, healthcare, public administration and the integrated resorts.
These sectors collectively make up slightly less than 10 per cent of the economy. As such, Mr Lim said their growth will not be able to compensate for the decline in other sectors.
MPs also raised their concerns about what may be an oversupply of foreign workers during this current downturn, leading to foreign workers without jobs or competing for jobs with Singaporeans.
Mr Gan said his ministry will monitor the situation and calibrate companies’ access to foreign workers. He also warned that if foreign workers were the first to be laid off in a retrenchment exercise, this may adversely affect the competitiveness of companies.
Mr Gan said: "On the supply side, the Dependency Ratio framework helps to ensure local employment since companies’ access to foreign workers is dependent on the number of local workers they employ.
"The foreign worker levy, on the other hand, helps to moderate demand for foreign workers. If companies are required to retrench only foreign workers, they may be forced to close down or move to countries where they can have unlimited access to even cheaper labour.
"This will result in more job losses and in turn affect Singaporeans who work for these companies. This is a lose—lose outcome," said Mr Gan.
— CNA/ir
- wong chee tat :)
