 | Southeast Asia
Recession chips away at Singapore's good life
By Kalinga Seneviratne
SINGAPORE - Singaporeans used to the good life arebracing for tougher economic conditions this year, after therecession-hit island state suffered its worst quarterly tradecontraction in more than 20 years.
More than for other countries, a decline in trade activitymeans economic pain for Singapore because so much of its economyis deeply linked with the outside world.
Singapore, the world's 12th biggest trading nation, saw itstrade with the world plunge by 12.4 percent last year. That is thecountry's biggest trade contraction since the second quarter of1975.
This bad news was accompanied by another set of statistics,showing that the number of workers laid off last year was 35percent more than at the start of the last recession in 1985.
These grim indicators have prompted the government to warn itscitizens to tighten its belts further, even though Singapore'seconomy has performed better than its neighbors Malaysia,Indonesia and Thailand.
Speaking to the governing People's Action Party (PAP) annualconference last week, Deputy Prime Minister Lee Hsien Loong warnedSingaporeans that this year could be even more difficult than1998. ''Our problems are not yet over,'' he said.
Noting that the mood in the country has improved in recentmonths, he observed that Singapore would find it difficultto improve its economy unless and until its neighbors pullthemselves up.
Indonesia's economy is still weak and may have a turbulent yearwith election due in June, Lee said. He added Malaysia's economichealth has a ''big bearing'' on Singapore's well-being, andMalaysia was still not ''out of the economic woods yet."
For more than a decade, Singaporeans have enjoyed a lifestyleon a par with or even better than those of most developed countries.
But as the recession began to bite last year, many have begunto shed the excesses of this affluent lifestyle such as theemployment of foreign maids, going on overseas trips, buyingdesigner label clothes and buying into luxury housing.
The National Trade Union Congress (NTUC) said this week that12,800 workers in unionised companies lost their jobs last year,while the overall job losses were exceeded 27,000. They expect atleast another 10,000 to be retrenched this year.
In this country of 3 million people, there are another millionforeign workers, both professional and unskilled, employed here.
While the downturn in the construction industry has effectedforeign guest workers mainly from South Asia and Thailand, the joblosses NTUC pointed out have mainly been in the electronicsindustry which employs mostly locals and Malaysians who comeacross the border every day to work.
Manpower Minister Lee Boon Yang says that retrenchments lastyear were the highest rate in the last 12 to 15 years, and havebeen caused by a global downturn in the electronics industry.
The Trade Development Board (TDB), which released the gloomytrade statistics this month, says Singapore has been hard hit by aglut in the world market for its key electronic products, such asintegrated circuits and personal computers.
It says trade is suffering not only because of weak demand fromAsian trading partners, but also from a slowdown in demand fromkey export markets such as the U.S. and Europe.
Singapore's non-oil exports have also been declining for 10consecutive months since March 1998, says TDB's chief executiveBarry Desker. ''This suggests a slowdown in manufacturingactivities in months ahead,'' he suggested.
This trend worries NTUC because many of the laid-off locals areusually over 35 years of age. Recruitment agencies say employershave become extremely choosy and tend to go for younger workers,especially in manufacturing.
Singapore's seniority-based wage structure, which makesretaining older employers more expensive, could be a reason forthe higher proportion of older workers among the retrenched, saysNTUC. It has suggested that employers adopt a wage system whichpays workers according to the value of the job, not the length ofservice.
''Employers cannot regard and treat someone who is 30 or 35years old now as an old person. We cannot be overly dependent onforeign workers and every citizen must be given an opportunity tohave a job,'' said Ong Chin Ang, director of NTUC's industrialrelations department.
Domestic workers in Singapore, numbering more than 100,000mostly from the Philippines, Indonesia, Sri Lanka and Burma, arealso anxious about losing their jobs.
For most middle-class working couples here, having a foreigndomestic worker who did house chores and help their children dohomework was seen as essential.
But faced with the new economic reality - and the knowledgethat their parents and grandparents managed just fine on their own -more Singaporeans might have to give up domestic help.
Labor recruitment agencies report great difficulty not only infinding jobs for thousands of foreign applicants in their filesbut also for those already here and whom employers do not needanymore.
''It is very tough right now,'' Fatima Ahmed, a manager of adomestic help recruitment agency told IPS, showing a file full ofpictures of foreign women who have applied for employment here.''We have requests from many of our clients for alternativeplacement for their maid."
''Many of us are worried about being sent back home because ofthe economic crisis,'' said Linda, a Filipino who has worked asdomestic help here for seven years: ''If my employer decides notto renew my contract after it expires (usually every two years), Ihave no choice but to go home."
But the recession has created more work for members ofparliament, who in recent months have seen longer queues ofconstituents, made of them retrenched, in their ''meet thepeople'' sessions.
Among them was Mohan Kumar, who once headed a biomedicalresearch unit in a top private hospital. But the 49-year-oldscientist has been without a job since June because for most ofthe jobs he has applied for, he was found to be too old, tooqualified or too specialized.
(Inter Press Service)
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February 03, 1999
