SINGAPORE: Unemployment is expected to creep up further this year, as Singapore’s workforce ages and older workers who lose their jobs take longer to find new ones, said Prime Minister Lee Hsien Loong on Monday (May 1).
Even with a “good chance” of better economic growth this year, the Government expects a “steady trickle” of redundancies. As companies restructure, some workers will be displaced, Mr Lee told unionists gathered at Our Tampines Hub for the annual May Day Rally.
Singapore’s economy expanded by 2 per cent last year, up slightly from 2015’s 1.9 per cent, which was the country’s weakest annual growth rate since 2009. The unemployment rate climbed to 2.3 per cent in the first quarter of this year.
Still, Singapore’s unemployment rate is low in comparison to other developed countries, where they are typically much higher – at least 5 per cent, and sometimes, 10 per cent, Mr Lee said.
“We have to understand this trend, but at the same time we have to work hard to resist it, and to keep our workers in jobs,” he said.
He gave an example of PSA, which retained its workers when the port shifted to Pasir Panjang and used better technology. The workers were retrained, and quite a few took on new roles, he said.
The Keppel FELS yard. (Photo: Keppel)
The challenge for Singapore is to maintain its course, and to continue innovating and raising productivity, Mr Lee said.
Mr Lee also said that with global growth picking up, he is “cautiously optimistic” about Singapore’s economy. However, the country faces political risks and economic uncertainties – such as the US’ stance on bilateral trade balances, he said.
“The US has a big surplus with Singapore, so therefore our relations with the US are fine. Our ties with the US have remained very friendly – in fact, I just had a good phone call with President Trump last night and he invited me to go to Washington. I’ve agreed and I hope to do it sometime this year,” Mr Lee said.
“So, we continue to be very good friends with the US. But because our economy is so dependent on trade, if a trade war breaks out – even if we are not directly involved – it’s going to hurt our economy. We have to be prepared for this.”
