May Day’s Rally: What you need to know

GeneralMay 05, 2022 09:31

Source - Straits Times

Written by - Clare Chong

A recession may be looming: inflationary pressure amidst the war in Ukraine

In Prime Minister Lee Hsien Loong’s May Day Rally, he cautioned that Singaporeans need to brace for the impact given global inflation, further exacerbated by the ongoing conflict between Ukraine and Russia.

Said PM Lee, “(The Monetary Authority of Singapore) has tightened our monetary policy to reduce imported inflation. That is why the Singapore dollar has appreciated… (We are) taking steps to secure our food and energy supplies, just in case supplies are disrupted by the ongoing war”. However, he added that despite government support, “inflation will remain high; central banks in the developed countries are tightening their monetary policies, rising interest rates; global growth will be weaker, and there may be a recession within the next two years.”

Being a price taker in world markets, Singapore has to remain open and grow the economy further to stay competitive. However, economic growth alone is insufficient as success must be matched by social and political cohesion. As Russia is a big exporter of gas and oil, supply is currently disrupted, resulting in increased petrol and electricity prices worldwide. Food prices rose as Ukraine is one of the world’s largest exporters of cereal crops and vegetable oils. Singapore imports nearly all supplies of energy and is thus extremely vulnerable to energy price changes. Singapore has become collectively poorer S$8 billion per year.

Future of Work: Labour constraints and Worker-centric firms to perform well
Companies with worker-centric practices will perform well in the future labour market, said PM Lee. As the economy is producing more jobs than the Singapore population, Singapore has to maximise the potential of the “hardly growing” and aging domestic labour force. Businesses can transform by riding on industry trends, rebranding an industry to attract more workers, and creating more flexible work arrangements to enhance retention. Companies are working with labour unions to lead the changes in Singapore– “ tripartism in practice”. Furthermore, upcoming tripartite guidelines on flexible work arrangements will help to ease labour constraints in Singapore as more people, including mothers and caregivers, can continue to work and achieve a work-life balance. Other benefits like less peak hour travel and congestion and an increase in birth rate could result from flexible working conditions as well. 

What do you think of the upcoming challenges for businesses and workers in Singapore? How can you transform and pivot your business to thrive amid these challenges?

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