Hard work needed to keep up growth, says PM Lee

SINGAPORE — Buoyed by an upswing in several major and emerging economies, Singapore may achieve a better economic growth this year compared to last year’s 2-per-cent expansion, Prime Minister Lee Hsien Loong said. 

In his May Day message issued on Sunday (April 30), he also reiterated that over the long term, the unemployment rate is expected to rise as the economy matures - echoing a point made by Manpower Minister Lim Swee Say last week. Mr Lee said: “Other developed countries have unemployment rates of 5 per cent or higher. Our rate is currently lower at 2.2 per cent, but as our economy matures, I expect that to creep up.” 

With prospects for international trade still uncertain and the Singapore economy in transition, economic outlook is mixed both internationally and domestically, Mr Lee said. Singapore’s response “should be to work hard to keep up our growth”, he added. “We must also work harder to help workers stay employed, and find replacement jobs if they become unemployed.”

Calling for a tripartite effort from the Government, workers and employers, Mr Lee said that businesses must be willing to transform, adopt new technologies, expand overseas and seize the available opportunities. On their part, workers must be “adaptable, keen to upgrade and reskill themselves, when necessary changing careers to secure good jobs”.

The Government will take the lead, and give full support to employers and workers, Mr Lee said. For example, he cited the SkillsFuture and “Adapt and Grow” initiatives which offer “concrete help” to workers. Workers who have lost their jobs can turn to job-matching and Professional Conversion Courses.

In particular, the Government is paying close attention to professionals, managers and executives (PMEs) who worry about being displaced, Mr Lee said. “The Government is always on the side of workers, but we make sure we are business-friendly and support our businesses to grow so that we have jobs for all.”

Mr Lee noted that while total employment is expanding, Singapore is also seeing more retrenchments, and unemployment is creeping up. The mixed picture reflects an economy in transition: As businesses restructure to adapt to changing conditions, some existing jobs are being lost, even as new ones are being created, Mr Lee said. 

He reiterated that Singapore can no longer grow its economy at 5 to 7 per cent annually, but it can still achieve 2 to 3 per cent growth every year - by improving productivity. “Two to three per cent is a good growth rate for our current stage of development. It will mean we can continue creating newjobs and improving our lives,” Mr Lee said.   

Last week, the Monetary Authority of Singapore maintained the economic growth forecast for 2017 at between 1 and 3 per cent, even as it noted the pick-up in external economic conditions in its bi-annual macroeconomic review.

On the international front, there is an uptick in the economies of the United States, Europe, and Japan, as well as the emerging economies, Mr Lee said. “The US markets have reacted optimistically to the election of President (Donald) Trump,” he added.  

However, on the downside, the US attitude towards international trade has changed. Mr Lee note that the world’s largest economy has pulled out of the Trans-Pacific Partnership, and “prefers bilateral deals instead”. “When the G20 Finance Ministers met recently, they were unable to renew their standard pledge to keep global trade free and open, because the US objected,” Mr Lee said. “We will have to watch how other countries react to this US stance. If they too adopt win-lose approaches to trade, the result will be more protectionism, which will hurt everybody.”

On Sunday, the Prime Minister's Office also released a video recording of a discussion between Mr Lee and several union leaders held on Apr 19. Among other things, they spoke about the prospects for the various industries, where the jobs are and how the unions were helping workers to adapt to the economic restructuring. 

The union leaders highlighted the uneven performances among the sectors. For example, while the offshore and marine industry is in a downturn, the aerospace sector is growing. Even within the sectors, it is a mixed bag: The hotel industry, for instance, is experiencing high occupancy rates but margins are being squeezed. 

Pointing to the financial services industry, Mr Lee noted that "sometimes even within the industry, you may need to redeploy people". 

Some of the union leaders also noted how the workers in places such as Russia and Chengdu, China are hungry to learn. In contrast, Ms Zuhaina Ahmad, a career guide at the National Trades Union Congress Youth Career Network, said she has spoken to a few young Singaporeans "who feel that they are in an era where they are entitled or privileged to what the Government is giving". 

"If you study up to a degree stage, this is what you are entitled to. Not all of them are like that but I think we need to manage their expectations as well," she said. 

In response, Mr Lee said this was something that "we have to work on, always". "You must always want to do better but you cannot always want to hope for the sky and that is the challenge. Because if you are not hungry, you would not try but if you are unrealistic you would be disappointed," he said.