Coronavirus: Singapore pairs citizens with jobs and training amid record recession as GDP falls 13.2 per cent in Q2

Singapore's Manpower Ministry is actively pairing citizens with jobs and training opportunities amid a record recession that saw second-quarter growth shrink by 13.2 per cent year on year, with the government issuing a gloomier forecast of full-year GDP contracting between 5 and 7 per cent.

The ministry on Tuesday said 24,000 people had been placed in jobs or training opportunities between March and July, with about 40 per cent of them in PMET roles (professionals, managers, executives and technicians).

Yet, the bulk of the 24,000 roles are short-term positions lasting for less than one year, with some of them catering to Covid-19 operations.

"This reflects the fact that for short-term positions, employers [and] those on the receiving end, they will find it more easy to match people," said Manpower Minister Josephine Teo.

Teo said a total of 92,000 jobs, traineeship and attachment opportunities had already been made available as of the end of July, putting the government on track for a target of 100,000 within the current financial year. About 42,000 of these opportunities were from the private sector, Teo said, adding that there were "still pockets of hiring" with new jobs, such as in the electronics and precision engineering sectors despite a downturn in the broader manufacturing industry.

Among those who have found employment during the coronavirus pandemic is advertising executive Sherlyn Goh.

The 24-year-old was laid off in April by an advertising agency that specialises in travel companies, which cut its Asia Pacific headcount due to reduced revenue. She was then hired in June by a statutory board on a two-year contract but described the two months of unemployment as "quite an intense" period.

A man passes a department store on Orchard Road in Singapore. Photo: Bloomberg alt=A man passes a department store on Orchard Road in Singapore. Photo: Bloomberg

The city state, seen as a bellwether for trade-reliant economies, has experienced unprecedented job losses of 147,500 since the start of 2020. While foreigners bore the brunt of the losses in the first half of the year, locals are likely to account for a larger share in the months to come, according to economists Chua Hak Bin and Lee Ju Yee of Maybank Kim Eng.

For most of the second quarter, Singapore was under a strict lockdown to manage the spread of the pandemic. At the same time, closed international borders have dealt a heavy blow to the transport and tourism sectors. Exports, however, performed better than expected in the second quarter due to sector-specific trends, said Enterprise Singapore. Non-monetary gold and pharmaceuticals, as well as electronic exports, grew in the quarter.

Pedestrians leave a shopping centre on Orchard Road in Singapore. Photo: Bloomberg alt=Pedestrians leave a shopping centre on Orchard Road in Singapore. Photo: Bloomberg

Trade Minister Chan Chun Sing, speaking about the second quarter slump on Tuesday, said it was Singapore's worst quarterly performance on record.

"The painful truth is this - we are not returning to a pre-Covid world. Recovery will be some time yet.

"The forecast for 2020 essentially means the growth generated over the past two to three years will be negated," he added.

In particular, Chan noted how the world had "irrevocably" changed. Heightened tensions between world powers threatened to destabilise economies, while global companies were diversifying their production and supply chains, both of which could affect Singapore as a hub, he said. If Singapore businesses did not adapt quickly, they would be bypassed, he said.

The current situation differs from the 1997 Asian financial crisis and the global financial crisis about a decade ago. Then, Singapore could hunker down and wait for things to improve in the span of a few months.

'WE MUST CHART A NEW DIRECTION'

"If we wait it out, we will likely be in worse shape than we are now," he said. "We must chart a new direction now for a very different and uncertain future."

Chua and Lee of Maybank Kim Eng said Singapore's economic recovery in the second half of the year would be "sluggish and choppy", likely to be dampened by slow reopening and strict border controls. Singapore currently has travel lanes set up with China and Malaysia.

"Rising Covid-19 cases including in parts of Southeast Asia will likely mean that strict border controls will remain for longer," they said. "The [Singapore] government may have to extend some of the fiscal support schemes, albeit scaled-down and targeted towards worst hit sectors."

Analysts have predicted that job cuts for 2020 will reach between 180,000 to 220,000, and increase as government subsidies and wage support measures aimed at helping companies cope with the coronavirus pandemic expire this month. The government pledged S$93 billion (US$68 billion) - about one-fifth of the country's S$500 billion economy - in stimulus measures earlier this year.

As for whether schemes to support firms would be extended beyond August, Teo said Finance Minister Heng Swee Keat would address that "quite soon".

Teo added that retrenchments could not be avoided, reflecting economists' view that some jobs could be destroyed permanently as economic restructuring reshapes industries.

For freshly displaced workers, Teo stressed the government would try to find them a job. If none were immediately available, they would aim for an attachment or traineeship opportunity so citizens could get relevant industry experience and pick up new skills.

The manpower ministry will also provide weekly jobs situation reports - the first of its kind announced today - for citizens to better understand the local labour market.

Singapore's data comes as other major economies are also reporting GDP contractions and high job losses. The Organisation for Economic Cooperation and Development (OECD) has predicted that economies will contract by an average of 7.5 per cent this year, with the United States and Japan shrinking 7.3 per cent and 6 per cent respectively.

The OECD said in a report on South Korea on Tuesday that Asia's fourth biggest economy would take the smallest hit to growth of any advanced economy this year, after it was able to limit the spread of the coronavirus without imposing severe lockdowns.

South Korea's gross domestic product would fall just 0.8 per cent in 2020, a slight improvement from the 1.2 per cent downturn in GDP forecast in June, it said.

Additional reporting by Bloomberg and Reuters

This article originally appeared on the South China Morning Post (SCMP).

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