ILO finds discouraged workers in Singapore

More than four million people around the world stopped looking for jobs last year, according to the International Labour Organization (ILO).

Discouraged workers: International Labour Organization report

The proportion of discouraged workers – who would rather be working but couldn’t find jobs – was particularly high in Singapore, as this chart shows.  It’s taken from the ILO’s newly released World of Work 2010 report, a labour market study from 2009 till the first quarter of 2010. The  chart is taken from the full report, which can be found here on the ILO website.

While the number of unemployed people in Singapore is small, those out of work are having a harder time finding new jobs than in 2007 and 2008, according to data from the Ministry of Manpower. You can see the figures at the end of this post.

Continue Reading

5.9% Singaporeans jobless, most new jobs are for less than three months

Consider yourself better off if you earn more than 2,600 Singapore dollars ($1,880) a month. For half the 1.99 million working Singaporeans and permanent residents earn less than that. And the majority of workers who found new jobs this year were hired on contracts for less than three months.

Let me quote from the Ministry of Manpower's Singapore Workforce, 2009 report released today:

Amid the global recession, the proportion of residents aged 25 to 64 in employment fell for the first time in six years to 75.8% in June 2009 from the peak of 77.0% a year ago. This mainly reflected the decline in employment rate for residents in the prime-working age group of 25 to 54 from 81.4% to 80.1%…

There were 5.9% or 116,300 persons (non-seasonally adjusted) in the resident labour force who were unemployed in June 2009, significantly higher than 4.0% or 76,200 a year ago. The rise was felt across all occupations and industries. The unemployment rate increased over the year from 4.3% to 7.1% for production & related workers; sharper than the increase from 5.8% to 7.6% for clerical, sales & service workers; and 2.5% to 3.9% for professionals, managers, executives & technicians.

The report says:

Even though it had decreased, the employment rate for prime-working age men in Singapore remained higher than in many developed and Asian economies…

The comparison with developed economies is not quite appropriate. For the unemployed in welfare states can seek social security. So they may register themselves as unemployed. That's not the case in Singapore.

Still, the government has done good work, saving as many jobs as possible by helping companies pay their workers through the jobs credit programme. More people might have lost their jobs if the government had not helped companies make payroll.

Most new jobs for less than three months

But that does not alter the fact that the labour market has become more uncertain.

Most of the new jobs created are not only temporary — but for less than three months. It's all there in the ministry report:

Continue Reading

Resilience Package cheaper than UBS, Citi stakes

The Singapore government has come out with a bold 20.5 billion Singapore dollar (S13.6 billion) Resilience Package to save jobs and fight the city state’s deepest recession since independence in 1965.

The massive stimulus package unveiled as part of this year’s budget today along with a corporate tax cut from 18 percent to 17 percent is unprecedented in Singapore’s history. It amounts to eight percent of the gross domestic product, reports Bloomberg.

For the first time the government is dipping into official reserves to draw 4.9 billion Singapore dollars for two schemes – Jobs Credit, giving employers cash grants to retain workers, and the Special Risk-Sharing Initiative, to stimulate bank lending.

The stimulus package, which will create an 8.7 billion Singapore dollar overall  budget balance deficit in the financial year 2009, is one of the largest yet announced by Asia-Pacific governments, reports AFP.

But the 20.5 billion Singapore dollar Resilience Package falls billions short of Singapore’s total investments in the troubled banking giants, Citigroup and UBS.

The Singapore sovereign wealth fund, Government of Singapore Investment Corporation (GIC) had invested about 11 billion Swiss francs (about $9.75 billion) in the Swiss bank UBS in December 2007 and $6.9 billion in US bank Citigroup in January 2008.

GIC manages Singapore’s foreign reserves.

This shows an international banking giant needs a much bigger investment than needed to stimulate an economy of 4.84 million people.

Singapore’s other sovereign wealth fund, Temasek Holdings, has invested $8.3 billion in another troubled US bank, Merrill Lynch, AFP reported in September.

GIC chief investment officer Ng Kok Song last September acknowledged that GIC had suffered some paper losses from its investment in UBS. GIC is also believed to have suffered some paper losses from its  investment in Citi, the Straits Times reported at the time.

Singapore Finance Minister Tharman said in his Budget speech today:

The Resilience Package will not get us out of the recession, as long as the global economy continues to contract. But it will help avert an even sharper downturn, and more lasting damage to the economy.

The Government will keep a close watch on the global situation and its impact on Singapore. We remain ready to undertake further measures if necessary over the course of the year and the next few years.

No doubt the government will do just.The 20.5 billion Singapore dollar Resilience Package includes 5.1 billion Singapore dollars to save jobs, 5.8 billion Singapore dollars to stimulate bank lending, 2.6 billion Singapore dollars to support households, another 2.6 billion Singapore dollars for business grants and tax measures, and 4.4 billion Singapore dollars to develop infrastructure and spend on education and health care. 

As part of the package comes into effect in March, it will increase the budget deficit to 2.2 billion Singapore dollars or 0.8 percent of the GDP for the current financial year 2008, the minister said. The overall budget balance deficit will increase to 8.7 billion Singapore dollars or 3.5 percent of the GDP in the new financial year 2009 after transfers to endowment and trust funds and contributions from Net Investment Returns, he added.

The government also cut corporate taxes for the second time in three years. Cut to 18 percent last year, now the maximum tax rate payable by companies will be 17 percent.

Hong Kong last year lowered its company tax rate by 1 percentage point to 16.5 percent.

Hope over fear, Singapore!

There is every reason to believe the Singapore government will choose hope over fear when it unveils this year's budget tomorrow.

The rose-coloured spectacles have fallen off at last that induced officials to think the economy might still grow this year, despite the global downturn.

Now the economy is expected to shrink sharply, by two to five percent, this year, says the Ministry of Trade and Industry, which only two weeks ago was predicting between one percent growth and a two percent decline in the economy.

It is astonishing how a smart government like Singapore's with a reputation for economic acumen could get things so wrong that it had to change its annual economic forecast only two weeks after making the prediction.

But the government has come out of denial now — and prepared to confront whatever the future holds, no matter how dark and uncertain it seems.

The hope now

And that gives hope. Bloomberg reports today:

Singapore said its economy may shrink an unprecedented five percent this year, fanning speculation the government will announce record spending in its budget tomorrow to help companies hurt by the global recession.

Finance Minister Tharman Shanmugaratnam may outlay as much as 20 billion Singapore dollars ($13.3 billion), or eight percent of the gross domestic product, to help households and businesses survive the slump, Macquarie Capital Securities predicts. The government may also say it plans to tap into its reserves for the first time to fund its expenditure.

As Franklin Delano Roosevelt said long ago: "The only thing we have to fear is fear itself."

Singapore's leaders, who include scholars and meritocrats, will be familiar with the quote — and know, from experience, that it's the truth.

Continue Reading

Singapore facing worst downturn in 40 years

“Singapore poised on the cusp of its worst downturn since independence,” says the Straits Times. That means it has never been so bad in more than 40 years since Singapore became independent in 1965.

The Singapore newspaper doesn’t go into further detail, but one only had to leaf through the pages yesterday. There are so few jobs that the paper didn’t publish the usual separate Saturday Recruit supplement yesterday, running the job ads with the other classified sections instead. It’s a terrible comedown from the good times when the Recruit supplement used to be a big fat pullout flush with ads on Saturdays.