Is a recession at our doorstep?

workers1An analyst interviewed by the local news broadcaster recently said that “Singaporeans should prepare for tougher conditions ahead”.

And if you ask me, I think that is true.

An elderly man is crying outside a national bank branch as pensioners queue to get their pensions, with a limit of 120 euros, in Thessaloniki on 3 July, 2015. Greece is almost evenly split over a crucial weekend referendum that could decide its financial fate, with a 'Yes' result possibly ahead by a whisker, the latest survey Friday showed. Prime Minister Alexis Tsipras's government is asking Greece's voters to vote 'No' to a technically phrased question asking if they are willing to accept more tough austerity conditions from international creditors in exchange for bailout funds. AFP PHOTO /Sakis Mitrolidis        (Photo credit should read SAKIS MITROLIDIS/AFP/Getty Images)
(Photo credit: SAKIS MITROLIDIS/AFP/Getty Images)

The global economic conditions look gloomy with the Greece exit from the European Union, while nearer home, regional political instability casts a pall over the future ahead.

Here at home, our unemployment rate rose 2% in June, up from 1.8 % in March. However, according to a human capital training and consultancy provider, the increase does not come as a surprise, since the second quarter usually sees an influx of graduates entering the workforce.

In addition, the Ministry of Manpower said overall employment growth for the first half of 2015 slowed down as compared to a year ago.

What does this mean? Where are we heading?

From the looks of it, it won’t be long before we enter a period of recession. In fact, we are already standing at the door of an impending global recession.

The last recession that Singapore experienced was in 2009. The unemployment rate then rose to 4.5%. Employees endured salary freezes and wage cuts to reduce business costs and save jobs.  But fortunately, the recovery was fast.  Compared with the G3 economies, Singapore’s employment jumped back to pre-crisis levels by the third quarter of 2009.

The question that comes to mind is: what contributed to the speedy recovery of the economy?

Good governance and leadership is definitely the key contributing factor.

The able leadership of Prime Minister Lee Hsien Loong together with his Cabinet members introduced measures to help Singapore get out of the recession quickly. Then Minister for Manpower Gan Kim Yong introduced the Skills Programme for Upgrading and Resilience (SPUR) in 2008 to help companies and workers to manage the economic downturn and invest in skills for the recovery.

lim swee say

The National Trades Union Congress led by then-Labour Chief Lim Swee Say also called on companies and workers to enhance organizational and personal productivity; and to be innovative and adaptable. This helped to prevent massive retrenchment of workers.

Will we see this same abled leadership doing its best to take Singapore through this impending recession?

As the elections loom closer, one thing’s for sure: If we do not have the same leadership that we currently have; the same leadership which has seen the nation through the recessions that Singapore faced since independence, then I’m not confident that we can bounce back from a recession as quickly as we have in previous recessions.


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Arthur Lee

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