SINGAPORE — Singapore’s economic forecast for 2020 means that growth in the past two to three years will be negated, and the country needs to adjust to the painful realities brought about by the COVID-19 pandemic, said Trade and Industry Minister Chan Chun Sing on Tuesday (11 August).
Chan’s comments at a virtual media conference came as the Ministry of Trade and Industry announced on the same day that it expects Singapore’s full-year gross domestic product (GDP) to fall between 5 per cent and 7 per cent.
GDP fell a record 13.2 per cent year-on-year in the second quarter and plunged 42.9 per cent from the previous three months on an annualised and seasonally adjusted basis.
Chan said, “I know that some are still hoping for a quick recovery, and a return to the familiarity of the ‘old normal’. The painful truth is this: We are not returning to a pre-Covid world. Recovery will still be some time yet. And the recovery is not likely to be smooth.”
He noted that the world has changed “irrevocably” in four areas.
The geopolitical environment which had allowed Singapore to thrive in the last 50 years has changed amid a fragmenting world of trade relations and technological standards.
The second factor is global companies are re-organising their production and supply chains. Companies are reviewing the need for regional hubs, while manufacturers are reviewing the locations of their factories.
Another shift is the nature of jobs has changed. COVID-19 has shown that remote working is possible. With remote work, there are more global job opportunities for Singapore’s workers. But it also means that other workers from other countries can do the same jobs from their homes, Chan said.
Lastly, as the economic pie grows more slowly or contracts, it will cause more societal tensions, such as between foreigners and locals.
Chan said staying still is not an option amid the fast evolving ground realities. In the next few months, the government will provide regular updates on the economy and job situation, sector by sector, he added.
The government will chart the new path based on three principles, Chan said.
First, Singapore will open for business, safely and sustainably.
The government will also help businesses and workers adjust to the new world. They will look at firms with opportunities to grow because of COVID-19, those who are suffering a drop in demand but will eventually recover, and those in industries that have permanently changed.
Finally, the government will establish the right conditions to preserve Singapore’s ability to compete for jobs, and boost its global links for markets, supplies, technology and talent.
Chan said there are tough and necessary decisions to make in order to overcome the crisis together.
He added, “The faster we adapt and change, the faster our recovery. Conversely, the slower we adapt and change, others will overtake us, and the opportunities will bypass us.”
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