Prime Minister's May Day Message 2003

30 Apr 2003

By Mr Goh Chok Tong

It never rains but pours. In the last few years, our economy has been buffeted by a succession of external crises. These include the Asian financial crisis, the September 11 attacks in the US, the Bali bomb blasts, the Iraqi war, and now, SARS (Severe Acute Respiratory Syndrome) from the southern regions of China.

The rains will remain heavy in the coming months. The war in Iraq and the SARS outbreak are hurting the economy, particularly our travel and hospitality industries. Hotels, retailers, restaurants and taxi-drivers, amongst others, have reported significant reductions in earnings. Economic growth this year will therefore be slower, at between 0.5 and 2.5 per cent. Employment will be affected. Overall unemployment rose to 4.5 per cent in March, up from 4.2 per cent in December last year.

We should prepare ourselves for higher levels of unemployment, as the full impact of SARS makes itself felt. Even if the economy puts up a sterling show in the second half of the year, the recovery in the labour market is expected to take place only in 2004.

We cannot control this bad weather, and will just have to wait it out. We will try to stay dry as best as we can, and use the time to plan for the future.

The Government has provided Singaporeans some shelter from the downpour, and will continue to do so. This year's budget contained several financial relief measures, including rebates on utilities and service and conservancy charges. The Government has also announced a first-aid package to help companies in sectors badly affected by the SARS outbreak. There are other on-going schemes to help Singaporeans take care of their health and housing needs, and their children's education. We have also put in place a comprehensive range of employment assistance.

The Government's umbrella, however, is not big enough to keep everyone dry. Hence, I am glad that many Singaporeans are putting up their own umbrellas, for example, by going into small business or taking on lower-paying jobs. They have shown tremendous resilience in these tough times.

The Economic Review Committee (ERC) has submitted its report, which has been accepted by the Government. Many of its recommendations have already been implemented, for example, tax changes to make Singapore more attractive to businesses and talent.

The ERC has also recommended that we look at other components of business costs, such as wage costs, to ensure that these continue to be internationally competitive. Our wages must reflect the economic value of the job and the productivity of the employee, rather than seniority in service. The Government urges the employers and unions to intensify efforts to implement such a performance-based wage system, and a monthly variable component in wages. A more rational and flexible wage structure will allow companies to make quick adjustments to their wage cost in a downturn, and hence preserve jobs. It will also enable them to reward workers better in an upturn.

Our workers have contributed to keeping costs down, by showing patience on CPF restoration and realism in wage demands. This has not gone unnoticed. Singaporeans' co-operative attitude and discipline are strong plus-points when EDB sells Singapore to potential investors.

Workers must also upgrade their capabilities and learn new skills, as many are doing. The new Statutory Board to be set up under the Ministry of Manpower will enhance the development and promotion of the continuing education and training of our workers.

Indeed, continuous upgrading is the only means for us to cope with an ever-changing job environment. This applies to us both as individuals and as an economy. New industries are constantly emerging, and existing industries disappearing. For instance, we will see more biomedical sciences, education, IT and media companies in the coming years. Within the more established industries, such as electronics, companies will start up new and higher-end activities, even as they shift existing operations overseas.

Besides a skilled and adaptable workforce, investors also look for a stable social environment, business-friendly legislation, quality political leadership, harmonious industrial relations, and increasingly, a strong intellectual property regime, when they decide where to put their money.

Singapore scores high marks in all these areas. Our economic fundamentals are strong and our policies right. This is why we have been able to attract many good investments right through the global economic downturn the last few years. And when the rains stop, these same strengths will enable a swift recovery.

In a sense, the character of our people is now being tested. There will always be problems along the way which we can do nothing about. What we can do is choose how we want to respond to them. If we whine and show a lack of fortitude, that is the surest way to cause a loss of confidence in us. We will be seen as a people softened by a good life, unable anymore to take hardship.

I believe, however, that Singaporeans are made of sterner stuff. I believe they have fighting spirit. Otherwise, Singapore would have collapsed by now under the weight of the many negative external developments.

Take for instance our doctors, nurses and other personnel working to help SARS-infected patients. They have conducted themselves magnificently throughout the crisis. They have displayed great resolve, and a noble sense of professional responsibility. They have chosen courage over their fear of SARS, to turn up at work every day to be with their patients and their colleagues. This is the kind of steel in our character that will see Singapore through hard times. We should honour them.

In this regard, I am glad to see that several organisations have initiated the Courage Fund, and that Singaporeans and foreigners in Singapore alike have contributed generously. The Government will match their contributions dollar-for-dollar, and in addition, contribute another S$1 million to this fund, in honour of our healthcare workers.

In this adverse weather, let us persevere and build new capabilities. Let us give courage to each other, and keep all our spirits up.

I wish all Singaporeans a Happy May Day.