Economic downturn could be structural, not cyclical: Chan Chun Sing

Labour chief Chan Chun Sing warned in his maiden blog post that the economic downturn Singapore is facing should not be treated as a cyclical one.
Labour chief Chan Chun Sing warned in his maiden blog post that the economic downturn Singapore is facing should not be treated as a cyclical one.ST PHOTO: KUA CHEE SIONG

SINGAPORE - In his maiden blog post on Thursday (Jan 14), labour chief Chan Chun Sing warned that the economic "downturn" Singapore is facing should not be treated as a cyclical one, but as a permanent structural one.

Mr Chan, who joined the National Trades Union Congress (NTUC) about a year ago, wrote: "In every downturn, it is better to assume there are deeper structural changes needed than assume that the downturn is cyclical and we will soon be back to business as usual."

In what he said would be the first of many posts by him on the NTUC blog www.labourbeat.org, Mr Chan addressed the current economic outlook, which he called "particularly challenging".

The Singapore economy grew a modest 2.1 per cent last year, the weakest rate of growth since the financial crisis of 2009. The slowdown in China is also expected to hit Singapore hard.

Mr Chan wrote: "Many are worried if there will be enough orders for the companies and jobs for workers in the coming months. Yet others wonder if the dark clouds over the horizon are a temporary cyclical downturn that will hopefully soon go away...How urgent is it to invest in new capabilities?"

He observed how technology shifts, such as the rise of digital news or online shopping, have thrown traditional industries into turmoil. "Technology has similarly changed many other consumer habits, creating new demand and destroying old ones."

He pondered how other jobs could be created for older workers who cannot acquire skills for these new industries

He also asked: "Are our companies bold enough to invest in new technology and markets in the face of an impending cyclical slowdown? If they don't invest now, can we survive larger structural shifts?"

To face the challenges ahead, he wrote, we have to create a conducive business environment underpinned by tripartite relations. "Our competition is not with one another but with the competition out there."

He added that we must keep ensuring workers can get their skills strengthened for the future economy, through initiatives such as SkillsFuture, and shun complacency, instead constantly questioning how we can keep our companies competitive and our costs low.

"This is also why I decided to set up this blog, as a platform to regularly share the labour movement's thoughts on how we can work together to overcome these hurdles."

oliviaho@sph.com.sg