He is confident Singapore will be able to weather uncertain global outlook
SINGAPORE is sailing into choppier waters amid uncertainty in the global economy, but Prime Minister Lee Hsien Loong is confident of Singapore’s economic prospects.
In his annual May Day message, Mr Lee sketched out the uncertain outlook due to the financial crisis in the United States.
But he maintained: ‘However the US financial problems play out, I am confident of our ability to cope…our economic fundamentals are sound and we are in a strong position.’
Buoyant industries such as tourism, construction and marine engineering will buffer Singapore from the effects of a US recession, he said.
The economy is still on track to grow by 4 per cent to 6 per cent this year. The job market is also expected to be full of jobs chasing workers.
‘In both manufacturing and services, many vacancies are waiting to be filled,’ the Prime Minister said.
Latest job figures released yesterday buttress this point.
They show that a record 68,400 jobs were added to the economy in the first three months of the year, exceeding the 62,500 jobs created in the previous quarter and 49,400 in the same quarter last year.
Still, despite the job boom, the unemployment rate climbed from 1.7 per cent in December to 2 per cent in March.
HSBC Bank economist Robert Prior-Wandesforde attributed this phenomenon to an expanding pool of job seekers, possibly a result of more foreigners seeking jobs here.
In his speech, Mr Lee also urged workers and employers to aim for ’sustainable’ wage changes this year, in anticipation of a year ahead that will be ‘much more challenging’ than 2007 had been.
‘Realistic settlements will address the concerns of workers, and yet allow companies to respond quickly to sudden changes in the economic environment,’ he said.
For now, the economy is still doing well although ‘dark storm clouds have gathered’.
Pointing to the sub-prime mortgage loan crisis in the United States, Mr Lee said: ‘We must watch closely how the situation in the US unfolds, and be ready to respond if things take a turn for the worse.’
Addressing the hot issue of rising inflation, Mr Lee said Singapore cannot shield itself completely from this worldwide phenomenon.
But the strong Singapore dollar has helped to maintain the purchasing power of workers’ salaries, he noted.
The Prime Minister also assured the people about the food situation here.
Singapore has enough supplies of food, notably rice, and ‘we can buy what we need from many sources’, he said.
Also, help will be given to those struggling to cope with the higher cost of living.
Relief measures from the Government total $3 billion, ranging in form from tax rebates and Medisave top-ups to the GST offset package and Growth Dividends given to every Singaporean from the last Budget surplus.
The first payout of the Growth Dividends was yesterday, with a second due on Oct 1.
Noting that Singapore’s strength is the strong cooperation among unions, employers and the Government, Mr Lee said this enabled them to take a ‘rational approach’ and act in Singapore’s collective best interest.
PM Lee added: ‘The external turbulence will put our solidarity under stress.
‘But we must not end up arguing among ourselves, or, worse, quarrelling over how to divide what we have, or else we will all be worse off.’
Source : Straits Times – 1 May 2008
