Trade and Industry Minister Chan Chun Sing said that “targeted” support measures must be given to different types of businesses in order to help them tide over the impact of COVID-19 pandemic. He said this on Thursday (13 August) while speaking in an interview on CNA’s Asia First.
During the interview, Mr Chan explained that there are three different types of companies.
The first type of business involves those that still see a growing market despite a poor economy caused by the pandemic, like those in the biopharma and precision engineering industries. The second includes those in industries like retail, and food and beverage where the demand has dipped temporarily but will eventually recover. The last type of companies are the worst hit sectors, according to Mr Chan, as “demand is not likely to come back in the short to medium term”, which includes businesses in the social entertainment industry.
“We need different measures for different type of companies – some to help them grow faster, some to help them consolidate their capacity while preserving their core capabilities, and some to help them pivot into new products and new markets,” Mr Chan said when asked by CNA if the Government will extend support measures for business or introduce another stimulus package.
He added, “So the measures are quite different and must be targeted in order for them to be useful to the respective companies.”
Mr Chan also went on to point out that the focus should not be on stimulating demand, since the bigger challenge is with weak external demand. As such, a stimulus package “would not be entirely helpful”.
“No matter what we do domestically, it will be very hard for us to replace the external demand that we used to have.
“So what we need to do is a package to help our companies pivot into new markets and new product range, so that we can … seize the new opportunities in the environment,” the minister said.
He added that such opportunities are now seen in the region as companies have restructured their production and supply chains.
“So this is where we need to … make sure that as the global companies reshuffle their global footprint of production and supply chains, some of them will land in Singapore.
“At the same time, we must make sure that we continue to defend the regional HQs (headquarters) and factories that have been planted here so that we can retain the jobs for our people, as many as possible,” he said.
On Tuesday (11 August), Mr Chan said that “we (Singapore) are not returning to a pre-COVID-19 world…We must chart a new direction now”, after the Ministry of Trade and Industry (MTI) released Singapore’s economic figures for Q2 of 2020.
He described the latest data released by MTI as Singapore’s “worst quarterly performance on record”.
MTI stated that the gross domestic product (GDP) will decrease between 5 and 7 per cent, after initially predicting that the economy will shrink between 4 and 7 per cent.
Singapore has, in fact, entered its worst recession since independence as the Government downgrades the country’s growth forecast for 2020.
Factors that will determine country’s growth trajectory
When asked if he is worried that the economic and employment situation in the country could get worse, Mr Chan mentioned that there are three factors that would determine Singapore’s growth trajectory in the future.
One of the factors is external demand, which will be swayed by the number of infections in other countries around the world and the resulting impact on economies and supply chain. However, Mr Chan said that this factor is not within the country’s control.
The remaining factors, however, are within control. This includes whether Singapore can slowly and sustainably re-open its domestic economy.
The minister said that there has been “good progress”, however warned people to not to be complacent as recurring waves of infections have caused other countries to shutdown their economy again.
“So if we can open safely and sustainably, we will be able to progressively recover from the third and fourth quarter this year,” he said.
If that’s not all, Mr Chan also said proactive and “tough” decisions will have to be made to reassign “capital, land, labour and other factors of production into more productive areas of work”.
He explained that these tough decisions boil down to how assistance can be given to different industries to tide through the pandemic, especially for businesses that will not see demand return within a short or medium term.
“We’ll have to make some tough decisions on how we can help them pivot into new products and new markets,” he noted.
He added, “For example people in the social entertainment industry, until and unless we can come up with a new model of how we can do business safely in this COVID-19 environment, it’d be very difficult for us so imagine them coming back online like what they used to do in the previous operating model.”