SUNS  4365 Tuesday 2 February 1999

Singapore: Recession chips away at the good life



Singapore, Feb 1 (IPS/Kalinga Seneviratne ) - Singaporeans used to the good life are bracing for tougher economic conditions this year, as the recession-hit island state suffered its worst quarterly trade contraction in more than 20 years.

More than for other countries, a decline in trade activity means economic pain for Singapore because so much of its economy is deeply linked with the outside world.

Singapore, the world's 12th biggest trading nation, saw its trade with the world plunge by 12.4% last year. That is the country's biggest trade contraction since the second quarter of 1975.

This bad news was accompanied by another set of statistics, showing that the number of workers laid off last year was 35 percent more than at the start of the last recession in 1985.

These grim indicators have prompted the government to warn its citizens to tighten its belts further, even though Singapore's economy has performed better than its neighbours Malaysia, Indonesia and Thailand.

Speaking to the governing People's Action Party (PAP) annual conference last week, Deputy Prime Minister Lee Hsien Loong warned Singaporeans that this year could be even more difficult than 1998. "Our problems are not yet over," he said.

Noting that the mood in the country has improved in recent months, he however observed that Singapore would find it difficult to improve its economy unless and until its neighbours pull themselves up.

Indonesia's economy is still weak and may have a turbulent year with election due in June, he said. Lee added Malaysia's economic health has a "big bearing" on Singapore's well-being, and Malaysia was still not "out of the economic woods yet".

For more than a decade, Singaporeans have enjoyed a lifestyle at par or even better than those of most developed countries.

But as the recession began to bite last year, many have begun to shed the excesses of this affluent lifestyle such as the employment of foreign maids, going on overseas trips, buying designer label clothes and buying into luxury housing.

The National Trade Union Congress (NTUC) said this week that 12,800 workers in unionised companies lost their jobs last year, while the overall job losses were exceeded 27,000. They expect at least another 10,000 to be retrenched this year.

In this country of 3 million people, there are another million foreign workers, both professional and unskilled, employed here. While the downturn in the construction industry has effected foreign
guest workers mainly from South Asia and Thailand, the job losses NTUC pointed out have mainly been in the electronics industry which employs mostly locals and Malaysians who come across the border every day to work.

Manpower Minister Lee Boon Yang says that retrenchments last year were the highest rate in the last 12 to 15 years, and have been caused by a global downturn in the electronics industry.

The Trade Development Board (TDB), which released the gloomy trade statistics this month, says Singapore has been hard hit by a glut in the world market for its key electronic products, such as integrated circuits and personal computers.

It says trade is suffering not only because of weak demand from Asian trading partners, but also from a slowdown in demand from key export markets such as the US and Europe.

Singapore's non-oil exports have also been declining for 10 consecutive months since March 1998, says TDB's chief executive Barry Desker. "This suggests a slowdown in manufacturing activities in months ahead," he suggested.

This trend worries NTUC because many of the laid-off locals are usually over 35 years of age. Recruitment agencies say employers have become extremely choosy and tend to go for younger workers, especially in manufacturing.

Singapore's seniority-based wage structure, which makes retaining older employers more expensive, could be a reason for the higher proportion of older workers among the retrenched, says NTUC. It has suggested that employers adopt a wage system which pays workers according to the value of the job, not the length of service.

"Employers cannot regard and treat someone who is 30 or 35 years old now as an old person. We cannot be overly dependent on foreign workers and every citizen must be given an opportunity to have a job," said Ong Chin Ang, director of NTUC's industrial relations department.

Domestic workers in Singapore, numbering more than 100,000 mostly from the Philippines, Indonesia, Sri Lanka and Burma, are also anxious about losing their jobs.

For most middle-class working couples here, having a foreign domestic worker who did house chores and help their children do homework was seen as essential.

But faced with the new economic reality -- and the knowledge that their parents and grandparents managed just fine on their own -- more Singaporeans might have to give up domestic help.

Labour recruitment agencies report great difficulty not only in finding jobs for thousands of foreign applicants in their files but also for those already here and whom employers do not need any more.

"It is very tough right now," Fatima Ahmed, a manager of a domestic help recruitment agency told IPS, showing a file full of pictures of foreign women who have applied for employment here.
"We have requests from many of our clients for alternative placement for their maid."

"Many of us are worried about being sent back home because of the economic crisis," said Linda, a Filipino who has worked as domestic help here for seven years: "If my employer decides not to renew my contract after it expires (usually every two years), I have no choice but to go home."

But the recession has created more work for members of parliament, who in recent months have seen longer queues of constituents, made of them retrenched, in their "meet the people" sessions.

Among them was Mohan Kumar, who once headed a biomedical research unit in a top private hospital. But the 49-year-old scientist has been without a job since June because for most of the jobs he has applied for, he was found to be too old, too qualified or too specialised.

So he went to his MP for help, but it is not clear whether the official was able to help him.