Thousands of Thai police to be deployed at pro-Thaksin rally

Thousands of Thai police to be deployed at pro-Thaksin rally

BANGKOK: More than 5,000 police are to be deployed in the Thai capital on Saturday as supporters of ousted premier Thaksin Shinawatra hold a massive anti-government protest, police said on Friday.

The group plans to rally in a Bangkok park before marching to Government House to make a series of demands, adopting the tactics of their foes who occupied the main government offices for three months last year.

Lieutenant General Suchart Mueankaoe, commander of Bangkok Metropolitan police, said 5,250 officers would police the event.

“Police will deploy 35 companies… and we have already coordinated with the military troops who will have 25 companies on standby,” Suchart told reporters after a security meeting held ahead of the rally.

He said a further 22 companies of police would be on stand by. Each police company has 150 officers while a military company has about 80.

The protesters, so-called “Red Shirts” as they wear crimson in opposition to the anti-Thaksin People’s Alliance for Democracy’s yellow clothes, said they can rally up to 50,000 people to Saturday’s demonstration.

But police said they expected 20,000 people to present their three demands to government – for those involved in the siege of Bangkok’s airports in November to be fired from government jobs and then prosecuted and for parliament to be dissolved.

National police chief General Patcharawat Wongsuwan has promised not to obstruct the rally but vowed to arrest any protesters who violate the law.

Thousands of anti-Thaksin protesters marched to Government House in August last year and occupied it for three months as they tried to topple the government elected in December 2007.

They said the ruling People Power Party (PPP) was running the country on behalf of Thaksin, who was ousted in a 2006 coup. As a figure, he remains enormously divisive, despite living in exile for most of the time since the putsch.

The PAD escalated their campaign and seized Bangkok’s two airports from November 25 to December 3, and eventually got their wish when a court dissolved the PPP and forced then-premier Somchai Wongsawat from office.

The move paved the way for the Democrat Party’s Abhisit Vejjajiva to be elected prime minister in a parliamentary vote last month.

- AFP/so

Source : Channel NewsAsia - 31 Jan 2009

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Singapore Manpower Minister calls on Singaporeans to stay positive

Singapore Manpower Minister calls on Singaporeans to stay positive

ACTING Manpower Minister Gan Kim Yong has urged Singaporeans not to lose heart in the face of rising layoffs and unemployment.
‘We can take a positive attitude and focus on helping workers cope with this recession. If we work together, we will be able to ride out this recession together,’ he told reporters at a community event.

Mr Gan’s comments last night, ahead of a Chinese New Year dinner in his Chua Chu Kang ward, came hours after his ministry released a report showing job losses last year hitting a five-year high of 16,000.

Most of the losses took place in the last three months of 2008, when the global financial crisis grew more severe.

This year, Mr Gan expects job losses to continue rising in the first two quarters, ‘because the economy is likely to continue to contract’.

‘But I think rather than focusing on projections, what we want to do is focus on saving jobs,’ he added.

Highlighting the Resilience Package in the new $20.5 billion Budget, Mr Gan said the Government was working very closely with its tripartite partners - employers and unions - to see how it could help companies cut costs and save jobs as well as continue to help Singaporean workers upgrade their skills.

Better-skilled workers will be more cost-competitive and attractive, and hopefully can retain their jobs, he added.

Mr Gan cited two new schemes as being particularly beneficial to companies and workers.

One is the Jobs Credit, which pays part of a worker’s wage, and the other is the Skills Programme for Upgrading and Resilience, or Spur, which subsidises a substantial part of the training of a worker.

Asked if more needed to be done to save jobs, given the latest retrenchments at Chartered Semiconductor, he said: ‘In a recession, companies have to restructure and, in the process of restructuring, retrenchments may not be totally avoidable.’

He added that those laid off could turn to Spur and train for jobs in such growing industries as education and health care.

Mr Gan also expressed the hope that Jobs Credit would help minimise layoffs, which analysts expect to surpass the 1998 high of about 30,000.

He was also asked about the goals labour chief Lim Swee Say set for unionists the previous day.

One of them was to keep the resident unemployment rate below the 5.2 per cent high in Sars-stricken 2003. Latest figures put it at 3.2 per cent last year.

Describing the goal as ‘very ambitious and challenging’, Mr Gan added: ‘We should not shy away from the target just because it is challenging or difficult to achieve.’

Source : Straits Times - 31 Jan 2009

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16,000 lost jobs last year

16,000 lost jobs last year

Manufacturing hardest hit, with services likely to add to the toll this year

By Zakir Hussain, Political Correspondent

THE number of workers who lost their jobs last year soared to about 16,000, a five-year high.
Of these, 13,400 were retrenched and the remaining 2,600 were contract workers asked to go before their contracts ended.

The surge, reported by the Ministry of Manpower (MOM) yesterday, reflects the toll from the global financial crisis, which is expected to get worse.

The Government has warned that layoffs could reach levels seen in previous recessions, like the 1998 Asian financial crisis. Retrenchments then peaked at 30,000.

However, Acting Manpower Minister Gan Kim Yong told Singaporeans last night that even though retrenchments and unemployment will continue to go up, there is no need to be demoralised.

The Government has taken steps to stem job losses and help those laid off to re-skill and find other jobs, he told reporters at a community event.

He cited especially the Jobs Credit scheme, which pays for part of a worker’s wage, and the Skills Programme for Upgrading and Resilience, or Spur, which heavily subsidises worker training.

Earlier, analysts interviewed said MOM’s figures on the job losses were just the tip of the iceberg. They also said the number of new jobs added this year is unlikely to be anywhere near last year’s.

Said Standard Chartered economist Alvin Liew: ‘I would not be surprised to find job creation to be negative in the first half of this year.’

About 227,200 new jobs were added last year, most of them in the first nine months, said MOM when it gave its preliminary estimates on the employment situation here.

In the last quarter, the global turmoil caused job growth to slow significantly and layoffs to rise substantially.

This was inevitable, as the economy contracted by 12.5 per cent against the previous quarter, the biggest quarterly decline ever reported.

Worst off was the export-oriented manufacturing sector as global demand plunged. Layoffs added up to 8,300 or three-fifths of total retrenchments.

HSBC economist Robert Prior-Wandesforde says manufacturing jobs ‘look particularly vulnerable’ for the rest of the year.

Retrenchment in construction was negligible (200) while the services sector laid off 4,900, signalling that the recession would be far-reaching.

Most of those laid off in services were asked to go in the last quarter. The figure jumped more than five times to 3,200, from 562 in the preceding quarter.

Most were in the financial services and wholesale trade industries, said MOM.

Economist Choy Keen Meng of Nanyang Technological University foresees labour-intensive trade and tourism to bump up the number this year. Retrenchment will rise throughout the year, he added.

With the huge job losses in the last quarter of 2008, Singapore’s unemployment rate rose to 2.6 per cent in December, up from 2.2 per cent in September.

But for the resident population, made up of Singaporeans and permanent residents, the corresponding rates were 3.7 per cent and 3.3 per cent.

When the whole year is taken into account, this rate for residents drops to 3.2 per cent, which is below the 2003 rate when Sars sent the economy reeling. The rate then was 5.2 per cent.

In actual numbers, an average of 62,900 residents were unemployed in 2008, against 56,700 in 2007, said MOM.

Last year, both locals and foreigners gained from the bounty of work. Out of the 227,200 new jobs, about 70,400 went to locals and 156,900 to foreigners, most of whom took jobs that locals were not available for.

But the number slowed in the last quarter, when just 26,900 new jobs were added. This is nearly half of the 55,700 jobs created in the preceding quarter.

However, what is significant is that slightly more than half of the 26,900 new jobs went to locals, noted Mr Gan.

Mr Prior-Wandesforde says of this year’s job market: ‘Even if the economy picks up in the second half of 2009 as we anticipate, the labour market won’t improve until well into 2010.’

Source : Straits Times - 31 Jan 2009

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Hotel room rates up 30% y-o-y: survey

Hotel room rates up 30% y-o-y: survey

The Asia-Pacific as a whole posted strong growth of 24%, helped in part by the weaker British pound

By NISHA RAMCHANDANI

WHILE the second half of last year proved to be challenging for Singapore’s tourism industry, hotel room rates still grew 30 per cent year-on-year in 2008, says a survey by the UK-based Hogg Robinson Group (HRG).

According to data from the corporate travel services company, room rates here were up 30 per cent from 2007, climbing to an average of £136.72 (S$292).

Of all the markets surveyed, Abu Dhabi posted the highest increase in average room rates, jumping 36 per cent to £191.47.

Beijing saw a significant 31 per cent average rate rise to £123.68 on the back of the 2008 Olympic Games and a shortage of hotel rooms. However, ‘data shows that rates have since returned to a more modest growth rate’, HRG said.

The Asia-Pacific as a whole posted a strong growth rate of 24 per cent, helped in part by the weaker British pound in the second half of the year.

Moscow was ranked the most expensive city worldwide with hotel room rates averaging £303.35, while New York was second with £222.97.

The Singapore Tourism Board has yet to release full-year 2008 statistics. However, based on January-November 2008 figures, the average room rate increased 23.5 per cent to $248, revenue per available room grew 15.4 per cent to $203 and occupancy decreased 5.7 percentage points to 82 per cent.

Margaret Bowler, director of global hotel relations at HRG, said: ‘The hotel industry has reported a mixed picture over 2008. There is no doubt that this is a challenging time for corporate travellers and hoteliers.’

However, Ms Bowler pointed out that the changing market brings opportunities for corporate travellers. ‘As occupancy levels balance out, corporations will gain greater access to negotiated rates,’ she said.

‘Corporate travellers will increasingly be able to secure value added services as part of their rates including free Internet access, complimentary parking, food and beverages.’

HRG’s full-year survey is based on a combination of industry intelligence, actual room nights booked and rates paid by its UK clients during January-December 2008, compared with the same period in 2007.

Source : Business Times - 31 Jan 2009

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Bank lending slides further in December

Bank lending slides further in December

For SMEs like fashion retailer bYSI, hope lies in new government loan schemes which take effect on Feb1

By CONRAD TAN

BANK lending fell for a second straight month in December as loans to businesses continued to shrink and more companies folded, underlying the enormity of the challenge the government faces in trying to stimulate the flow of credit to the broader economy to keep viable firms afloat.

MR TAN
Has plans to open four new stores in Singapore this year on top of the 13 that bYSI already has here, two more in Vietnam where it has one now, and ‘four or five elsewhere in the region’
Total Singapore-dollar bank loans at end-2008 stood at $272.2 billion, down 0.4 per cent from end-November, the latest figures from the Monetary Authority of Singapore show.

Over the year, bank lending was up 16.6 per cent - the slowest pace of growth since November 2007 and the first time since then that annual growth has been less than 20 per cent.

David Cohen, director of Asian economic forecasting at Action Economics in Singapore, said the sharp slowdown in bank lending to businesses reflects tighter credit standards at banks, and firms themselves borrowing less as they struggle to cope with the recession.

‘Both the supply and demand for credit are slowing, even though the government is trying to keep it flowing,’ he said.

Loans to businesses fell 1.1 per cent during December to $157.8 billion at year-end, extending a 2.2 per cent slide in November. The December decline was led by falls in lending to the general commerce and manufacturing sectors.

‘We do expect further deceleration’ in overall bank lending growth, said OCBC economist Selena Ling. ‘There’s a great likelihood that we’ll slip to single-digit year-on-year growth this year.’

More businesses went bust last year than in each of the previous two years, data from the Insolvency and Public Trustee’s Office show. From January to December 2008, 132 firms were forcibly wound up, compared to 106 in 2007 and 130 in 2006.

Even companies that are doing well are being squeezed by banks eager to cut their credit exposure, and demands for payment from suppliers who are themselves struggling to cope with fewer orders as the recession bites.

One such firm is homegrown fashion retailer bYSI International, which has continued to open new stores here even as the economy has weakened. With its brightly lit store fronts and glossy displays, it is the very picture of a flourishing business - the sort the government hopes to help with the measures announced in the Budget on Jan 22.

Late last year, as financial markets were gripped by turmoil, bYSI’s banks stepped up the pressure on the firm to repay its loans, which fell due every 90 days, said founder and general manager Tan Yew Kiat.

In response, the firm repaid all of its bank borrowings - ‘in the hundreds of thousands of dollars’, he said. ‘It was better to pay them off rather than wait for a letter to arrive from the bank.’

An official at one bank told him it decided to cut credit exposure after financial turmoil erupted in September when US investment bank Lehman Brothers collapsed, he said.

bYSI’s situation also shows the damage the credit crunch has inflicted on the broader economy. ‘Nine months ago all my suppliers were talking about inflation’ and pressing for higher prices for goods, said Mr Tan. ‘Now they’re talking about survival.’

In the grip of recession, suppliers are ‘much more reasonable’ with prices but are demanding they be paid more promptly, he said. For bYSI, as at many other firms, ‘managing cash flow is now critical’.

But there is hope. bYSI still plans to expand - and intends to make full use of the new government loan schemes aimed at helping small and medium enterprises, which take effect on Feb 1. The schemes sound like ‘a great help to us’, said Mr Tan.

The government has said it will guarantee 80 per cent of the risk of new bank loans of up to $5 million and up to four years maturity to businesses here, starting on Feb 1, for one year. Mr Tan said he expects to apply for the full $5 million. ‘We need that sort of sum for our expansion.’

He plans to open four new stores in Singapore this year on top of the 13 bYSI already has here, two more in Vietnam where it has one now, and ‘four or five elsewhere in the region’.

OCBC’s Ms Ling said she is ‘hopeful’ the government’s measures to stimulate bank lending will prevent an outright contraction in credit this year. ‘But the proof of the pudding is in the eating,’ she added.

One of the reasons the government is keen to help businesses - especially SMEs - is to keep workers employed through the worst recession since independence. SMEs like bYSI employ the vast majority of workers in Singapore.

At bYSI ‘we’ve been cutting our margins’ and preparing for a downturn of ‘at least six months’, said Mr Tan.

As a result of the aggressive strategy, sales have increased, though profit margins are down. ‘We have to face reality,’ he said. ‘This year, it’s all about survival’.

Source : Business Times - 31 Jan 2009

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Fears rise over how US will foot the bill

Fears rise over how US will foot the bill

WEF summit participants worry that the rescue package could drive up inflation and interest rates around the world

(Davos, Switzerland)

EVEN as the US Congress looks for ways to expand President Barack Obama’s US$819 billion stimulus package, the rest of the world is wondering how Washington will pay for it all.

Few attending the World Economic Forum (WEF) question the need to kick-start the US eco- nomy with a package that could reach US$1 trillion over two years. But the long-term fallout from increased borrowing by the federal government, and its potential to drive up inflation and interest rates around the world, seems to be getting more attention here than in Washington.

‘The US needs to show some proof they have a plan to get out of the fiscal problem,’ said Ernesto Zedillo, the ex-Mexican president who helped steer Mexico through a financial crisis in 1994. ‘We, as developing countries, need to know we won’t be crowded out of the capital markets, which is already happening.’

Mr Zedillo said that Washington, unlike most other countries, had the option of simply printing more money, because the dollar was a reserve currency for the rest of the world. Over the long run, that could force long-term interest rates higher and drive down the value of the dollar, undermining the benefits that come with its special status.

While the dollar’s status as refuge in a time of turmoil should prevent that kind of sell-off for now, a number of financial specialists warned that if fundamental factors like the lack of American savings and bloated budget deficits did not change, the dollar could eventually fall sharply.

‘There aren’t that many safe havens,’ said Alan Blinder, a Princeton economist who is a former vice-chairman of the Federal Reserve in Washington, explaining why the dollar’s status as a reserve currency is unlikely to be threatened. Instead, it is the dollar’s long-term value against other currencies that is vulnerable. ‘At some point, there may be so much Treasury debt, that investors may start wondering if they are overloaded in dollar assets.’

While the focus in Washington has been on putting together a stimulus package that will attract broader political support when it comes up for a vote in the Senate, the talk here is about the coming avalanche of Treasury debt needed to pay for the plan on top of the bailout measures approved last fall, like the US$700 billion Troubled Asset Relief Program or TARP.

The stimulus was approved on Wednesday by the House without Republican support, and could grow larger - mostly likely with additional tax cuts - to attract a bipartisan coalition.

US officials maintain they are aware of the challenge. A top White House adviser, Valerie Jarrett, promised here on Thursday that once the stimulus plan achieved its intended affect, the US would ‘restore fiscal responsibility and return to a sustainable economic path’.

To be sure, Congress and the White House will ultimately need to refill the government’s coffers, but how they might do that is barely on the radar screen in Washington at this point.

Niall Ferguson, a Harvard historian who has studied borrowing and its impact on national power, estimates that some US$2.2 trillion in new government debt will be issued this year, assuming the stimulus plan is approved. ‘You either crowd out other borrowers or you print money,’ Mr Ferguson added. ‘There is no way you can have US$2.2 trillion in borrowing without influencing interest rates or inflation in the long term.’

He was particularly struck by the new borrowing because the roots of the current crisis lay in an excess of American debt at all levels, from individual homeowners with sub-prime mortgages to Wall Street banks who let their balance sheets balloon.

‘This is a crisis of excessive debt, which reached 355 per cent of American gross domestic product,’ he said. ‘It cannot be solved with more debt.’ While Mr Ferguson is a sceptic of the Keynesian thinking behind Mr Obama’s plan - rather than borrowing and spending to stimulate the economy, he favours corporate tax cuts - even supporters of the plan like Mr Zedillo and Stephen Roach of Morgan Stanley have called on the White House to quickly address how it will pay for the spending in the long term.

The stimulus is widely expected to pass, but once it does, Mr Roach said the focus would shift to ‘who foots the bill and what is the exit strategy. We don’t have the answer to either question.’

Mr Zedillo, who remembers how Mexico was forced to tighten its belt when it received billions of dollars from Washington to keep its economy from collapsing in 1994, was even more blunt.

‘People are not stupid,’ he said. ‘They see the huge deficit, the huge spending, and wonder what comes next.’

AP

Source : Business Times - 31 Jan 2009

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Chartered axing 540 jobs in Singapore

Chartered axing 540 jobs in Singapore

The cutback will span ‘all job functions’ but largely involves manufacturing positions

By ONG BOON KIAT

(Singapore)

FALLING demand and a deteriorating global economy has forced Chartered Semiconductor Manufacturing into axing around 600 jobs, of which 90 per cent - or around 540 jobs - will be from Singapore.

The exercise, to be carried out in the coming week, will span ‘all job functions’ but largely involves manufacturing positions, and also affects Chartered’s workforce in Taiwan, Europe and the US, chief executive Chia Song Hwee told BT yesterday, following the chipmaker’s fourth quarter results announcement.

‘We are trying to resize our workforce to our (plant) utilisation levels. After this cut, we will have around 6,400 people in Singapore,’ Mr Chia said.

Chartered posted a net loss of US$114 million for the three months to Dec 31, 2008, reversing the year-ago Q4 net income of US$5.9 million.

Revenue fell by 0.3 per cent to US$351.7 million.

The Temasek Holdings-linked foundry, which counted Broadcom and Qualcomm as top customers in 2008, had earlier projected a less severe Q4 net loss of between US$76 million and US$84 million.

Full year net loss for 2008 came to US$92.6 million, falling from the year-ago net income of US$101.7 million. Full year revenue rose 22.5 per cent to US$1.66 billion.

There was more bad news ahead: in its customary quarterly guidance, Chartered projected a Q1 net loss of between US$142 million and US$152 million. If that projection holds sway, it would be the firm’s biggest ever quarterly loss. Q1 sales could fall by as much as 40 per cent to US$232 million.

Mr Chia said that market demand will likely shrink more, and the company’s three near-term priorities are ‘lowering our break-even utilisation level; positioning for early phase of demand recovery; and preserving our cash and liquidity position’.

The company also plans to reduce capital expenditure by 35 per cent from 2008 to US$375 million this year.

Chartered shares closed unchanged yesterday at S$0.235.

Assessing Chartered’s loss-making full year performance, Mr Chia blamed several factors, including price erosion due to competition and the fall in plant utilisation in the second half of the year. Another reason was having to operate its 12-inch wafer fab facility at a sub-optimal product mix, due to slow demand for 65nm products. ‘The good news is that this situation can be easily corrected, and it is improving,’ he said.

Chartered’s troubles reflect a worldwide semiconductor industry sagging under the weight of a recession-hit economy. STMicroelectronics said this week it will cut as many as 4,500 jobs, while Advanced Micro Devices Inc (AMD) has said that it will slash 1,100 jobs. Samsung Electronics Co logged its first ever quarterly loss this month, while Taiwan Semiconductor Manufacturing Co recently forecasted its first quarterly loss since 1990.

Market researcher iSuppli recently revised its global semiconductor industry outlook, projecting a 9.4 per cent revenue drop this year to US$241.5 billion.

‘It is going to be very tough for the semiconductor industry, especially now that a large chunk of demand comes from the consumer electronics market - this makes it a lot more cyclical and prone to cutbacks in discretionary spending,’ said Carey Wong, research manager for OCBC Investment Research. ‘At best, most economists are looking at a mild economic recovery in late 2009 or early 2010, so a recovery in the semiconductor sector in mid to late 2010 is a possibility.’

He added that cost-cutting remains a temporary fix, as the issue is still the lack of demand.

Chartered said its latest move to reduce workforce by 600 - or 8 per cent of its global workforce - will help save around US$16 million a year. It expects to incur a one-time charge of around US$8 million in the first quarter due to the reduction.

The move brings Chartered’s total workforce reduction to around 1,300 positions since the third quarter of 2008, or around 18 per cent of its workforce.

According to a statement issued by the United Workers of Electronic and Electrical Industries yesterday evening, laid-off Chartered workers will receive fair retrenchment packages and help in looking for new jobs. The union said it has closely engaged Chartered since November last year to ‘explore various cost-cutting measures to save jobs’.

For Chartered, job cutting is a ‘good move to re-size its operation, but still a baby-step given the severity of the current downturn,’ said Ng Sze Ho, director of Asia-Pacific technology research at BNP Paribas Peregrine Securities. ‘A full-year loss is inevitable, which will put the company’s full focus back on cash preservation. We expect a more meaningful recovery to come only in 2010.’

Source : Business Times - 31 Jan 2009

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Singapore’s job market shrinks

Singapore’s job market shrinks

Overall unemployment rate averaged 2.3 per cent last year, up from 2.1 per cent in 2007

By LEE U-WEN

(Singapore)

NEW figures released by the government yesterday underscore how bleak the job market is. The overall unemployment rate averaged 2.3 per cent last year, up from 2.1 per cent in 2007 - the first time that it has risen since the record high of 4 per cent in 2003, according to preliminary estimates by the Ministry of Manpower.

The seasonally adjusted overall unemployment rate rose to 2.6 per cent in the three months to December from 2.2 per cent in the third quarter, as Singapore continued to feel the heat of retrenchments and weaker growth because of the global downturn.

About 73,100 Singapore residents were jobless in December, a 58 per cent jump year-on-year. On average, 62,900 residents were unemployed in 2008, compared with 56,700 in 2007.

Job growth slowed significantly, with just 26,900 jobs created in October-December 2008 - less than half the total gain of 55,700 in Q3 and the 62,500 jobs added in Q4 2007. The whole of 2008 saw 227,200 jobs added, down from 234,900 in 2007.

The ministry’s findings show that manufacturing led the way in terms of employment contraction, as the sector bled for the first time in more than five years. In total, 6,200 manufacturing jobs were lost in Q4, a sharp drop from 4,600 created in Q3 and 10,900 added a year earlier. For the whole of 2008, manufacturing employment grew 20,300 - less than half the increase of 49,300 in 2007.

The services industry saw fewer new jobs for a third straight quarter, with 21,000 created in Q4 2008, down from a high of 46,500 in Q1 that year. Construction, meanwhile, added 10,800 jobs in Q4 2008, a steep decrease from 16,500 in Q3.

For the whole of 2008, a total of 13,400 workers were retrenched, more than twice the 7,675 in 2007. Manufacturing and services accounted for the bulk of job losses, with 8,300 and 4,900 workers retrenched respectively.

Delving deeper into the Q4 figures, the ministry said that 7,000 workers lost their jobs during the three-month period, up substantially from 2,346 in Q3 and 1,966 in the same quarter a year earlier.

The number of workers retrenched in manufacturing more than doubled from 1,709 in Q3 to 3,700 in Q4. Driven by lay-offs in financial services and wholesale trade, retrenchments in services increased more than fourfold to 3,200, from only 562 in Q3.

Besides retrenchments, 1,500 workers were released prematurely from their contracts in Q4. For the whole of 2008, 16,000 workers were made redundant, almost double the 8,592 in 2007.

The labour movement said on Thursday that it aims to try and keep job losses to below 29,000 this year - a level last seen during the Asian financial crisis in 1998.

Speaking to reporters at a Chinese New Year dinner in Choa Chu Kang last night, Acting Manpower Minister Gan Kim Yong called the target ‘very ambitious and challenging’ but said that it is crucial for the government to work with its tripartite partners to try and save as many jobs as possible.

The ministry noted that both locals and foreigners benefited from job creation in 2008. Local employment grew by 70,400, although this was down from 90,400 the previous year. Foreign employment rose by 156,900, up from 144,500 the previous year.

As the economic downturn deepened, job growth for locals and foreigners slowed in the final quarter of 2008. As at December, there were 1,057,000 foreigners in the Singapore workforce, the ministry said, about 36 per cent of the 2.96 million people employed. The majority of the workforce - 64 per cent or 1.9 million people - were locals.

Citigroup economist Kit Wei Zheng said that the extent of employment deterioration is ‘more benign’ than expected, with net job creation still remaining positive.

‘But we should caution that the labour market down-cycle is still in its early days,’ he said. ‘As retrenchments and other redundancies continue to mount, we expect net job creation will turn negative within the next one to two quarters, likely peaking somewhere in the second half of 2009.

‘Manufacturing will likely bear the brunt of the job losses, with financial services, real estate and other services sectors also expected to lose jobs.’

Source : Business Times - 31 Jan 2009

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Package for Singapore, by express delivery

Package for Singapore, by express delivery

The story behind the nation’s most extraordinary Budget and the team that crafted it

By JAMIE LEE

(Singapore)

CLOSE to midnight before the Budget was announced, the team that crafted it, including Finance Minister Tharman Shanmugaratnam, tucked into steaming porridge, home-cooked by a staff member and topped with fresh chicken slices, peanuts, century eggs and fried dough fritters. Then it was back to work.

HAPPY WITH THEIR WORK
Part of the team that worked on delivering the special $20.5 billion resilience package. The exercise took them two frantic months compared with the usual three
For the Budget team at the Ministry of Finance (MoF), this is an annual ritual.

But in drawing up the Budget package to help Singapore brace itself for its worst recession ever, much else was unprecedented.

The exercise normally involves three months of hard work for government officials. It was squeezed into just two frantic months this time around as the Budget was brought forward to January from February this year - a reflection of the urgency behind delivering the $20.5 billion resilience package.

It was in November last year that Prime Minister Lee Hsien Loong announced that the Budget would be brought forward by a month to implement the measures swiftly.

As for tapping into reserves for the first time - something that was finalised towards the end of the exercise - Ms Lee said speech writers had to rack their brains for words such as ‘prudent’ and ‘extraordinary’ to emphasise that this was temporary.

And the team of more than 20 found out ‘not much earlier’ than the public that the Budget would be brought forward, Lee Kok Fatt, director of fiscal policy, told BT, adding that it was announced on a Thursday rather than the usual Friday because of the Chinese New Year holiday.

‘We also wanted to give the markets time to react,’ he said.

This meant ‘morning-to-morning’ working hours for the Budget team, said chief tax policy officer Doreen Tan.

‘It is as intensive as the other Budgets (but) because the time is more compressed, we have to achieve double impact in a shorter amount of time,’ she said.

With a laugh, Mr Lee mused: ‘It’s not that bad. I get two to three hours of sleep a day.’

‘The bottom line is that we have enough rest to make sure that we stay alert to check that the proposals we come up with are sensible ones,’ he said.

For the first time, MoF officials also spoke to bankers and traders directly on the credit issues - a sticking point as tight-fisted banks have been reluctant to grant loans to companies - rather than gather feedback through government agencies such as IE Singapore.

‘It was about October that this point about trade credit started to surface,’ said Mr Lee. ‘It became more and more apparent to us that this area needed greater attention and that’s when we started to talk directly to the bankers.’

This meant daily conversations with private sector players, including traders, insurers and bankers, added Jonathan Pflug, an officer dealing with economic strategy. ‘I spent about 30 per cent of the day on the phone.’

With the dramatic change in the economic situation, initial plans that were proposed in April - the time that they typically start preparing for the next fiscal package - had to be revised.

Besides making changes to existing trade financing schemes - proposals that had previously remained ‘in the background’ - the team quickly looked into boosting infrastructure spending.

Head of Budget policy Lee May Gee said that government agencies had to propose projects that could be brought forward.

‘It was a very compressed timeline, to ’scrub’ through all your pipeline projects to look at which are the projects that would be worthy to advance,’ said Ms Lee, adding that all agencies had about a month to prepare the proposals. Previously, they had up to three months.

And with the shortened timeframe, there was little room for errors, said Mr Lee.

‘If it was in February, we gave ourselves more buffer to check the data that came to us through the ministries,’ he said. ‘We just squeezed ourselves where these buffers were concerned, putting in more time to double check the numbers when they come in, and also working with other parts of the government . . . and getting their understanding that it has to be right the first time.’

But with continual changes in GDP forecasts amid a tightened deadline, the MoF team also had to decide which revised numbers were necessary to include against those which were ‘immaterial’ for the Budget and could be adjusted later, ‘even though it was very tempting to keep wanting to change as more information came in’, said Mr Lee.

As with previous Budgets, the team said that all proposals - including the ones on corporate tax rebates and CPF cuts that were eventually junked - were debated openly. The surprise co-sharing of wage costs, or the jobs credit system, emerged from that ‘organic’ process, said Mr Pflug.

‘The Minister had a very personal interest in all the measures and in particular, the measures that were unique and broad-based,’ he added. ‘He drove a lot of the discussions.’

Members from the Budget team also noted the meticulous nature of Mr Tharman, adding that besides editing the speech personally, he would send e-mails in the wee hours of the morning, though they said that they were not expected to reply immediately.

The final speech - which was approved at around 3am - also went through rounds of editing to convey the seriousness of the situation while inspiring hope and confidence, said Ms Lee, who is also a speech writer.

This was why the proposals on jobs credit and risk-sharing initiatives were announced at the start, because of their impact, while the report on the economic situation was something that the speech ‘got through rather quickly’, she added.

‘There was also a deliberate effort to highlight anecdotes,’ she said, but added that despite the seeming good publicity, some firms rejected their request to be mentioned because they did not want to be seen as being too positive.

As for tapping into reserves for the first time - something that was finalised towards the end of the exercise - Ms Lee said that speech writers had to rack their brains for words such as ‘prudent’ and ‘extraordinary’ to emphasise that this was temporary.

Still, the highlight of their word play went into creating the title of the package. Playing a bit of word jumble, the team finally settled on ‘resilience’.

‘We considered words like recovery, but that’s already used by the Americans,’ said Ms Lee.

What about the other words?

‘Some are unmentionable,’ quipped Mr Lee.

Source : Business Times - 31 Jan 2009

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