'Economic growth still positive'

ALTHOUGH Singapore slipped into a recession in 2008, its economic growth was still positive at 1.5 per cent, said Prime Minister Lee Hsien Loong on Wednesday.

It is, however, lower than the annual growth forecast of 2.5 per cent, owing to the severe fallout from the global financial crisis.

The anaemic economy dominated Mr Lee's New Year message, which outlined an outlook that continues to be 'highly uncertain' and facing the threat of a rise in retrenchments.

'We must therefore prepare for a difficult year ahead, and especially the first half of 2009,' he said.

'Our economy will probably contract further. More companies will be forced to downsize. So far we have not seen many job losses, but I expect more retrenchments in the next few months. We must be psychologically prepared.'

There were 6,418 layoffs in the first nine months of 2008 and analysts predict the figure in the new year could surpass the peak of 30,000 in 1998 during the Asian financial crisis.

Mr Lee, however, assured Singaporeans the Government will intensify its efforts to help companies and citizens cope with the crisis.

The details will be in the Budget to be unveiled on Jan 22.

'The emphasis is still to protect jobs,' he said. 'We will do more to help companies to stay afloat and continue to employ their workers.'

Keeping a lid on business costs, such as rental and wage bills, was among the measures he highlighted, adding that more financing support for companies are under study.

These are on top of its swift response to the global crisis when it introduced some help schemes in December.

They include a Government-backed enhanced loan scheme for companies and a training scheme that gives bosses more money to retrain, rather than retrench, workers. More than 120 companies will send over 4,200 workers for training under this Spur programme.

Mr Lee also pledged there could be off-Budget measures if the need arises.

He said: 'If more measures become necessary, we have the resources, and the will, to do more to see Singapore through this recession.'

In the meantime, he cautioned against viewing the Budget 2009 as a cure-all for the ailing economy.

'The Budget package will not restore our economy to high growth overnight. But our measures will moderate the impact on Singaporeans, and on our economy,' he said.

This is because the global recession, unlike the Asian financial crisis, is the worst in 60 years. It will take longer to recover, with several years of slow growth.

Singapore needs to seek out new growth opportunities so that it emerges stronger after the downturn, Mr Lee said.

'Hence, the Budget will also contain measures to develop our competitiveness and build up new and long term capabilities. Some businesses may not recover from the slump in global demand, but most should survive,' he said.

'We will help them to build up their operations, and also encourage new businesses to grow, so that there will always be good jobs for Singaporeans.'

But the Government can only do so much, said Mr Lee as he stressed the importance of tackling the crisis as one nation. He called on companies, unionists, and Singaporeans to help each other ride out the tough times.

Layoffs should be the last resort, he stressed while urging workers to upgrade their skills and take up even unpopular jobs in marine and construction.

Singaporeans can also look to new jobs from investment commitments which the Economic Development Board forecasts could exceed $10 billion in 2009.

- The Straits Times