Good evening comrades, ladies and gentlemenÂ
I am pleased to be here with you this evening for this 20th Anniversary Dinner of the Building Construction and Timber Industries Employees' Union, BATU.
It is another five more days before we usher in the New Year. The past twelve months 2002 had not been an easy one for many Singaporeans.
Just when we were about to climb out of the economic recession, the third quarter economic report by the Ministry of Trade and Industry added a shroud of uncertainty in the momentum of the recovery. Unemployment numbers rose.
Just when we were recovering from the shock of the September 11 incident, another terrorist bombing happened. This time it was close to home. It happened in Bali. In Singapore, the swift and decisive actions of our security agencies prevented members of the Jemaah Islamiyah from posing any threats. Nevertheless, the arrests brought home an important point. We cannot take the peace and stability in Singapore for granted.
Challenges Ahead
The environment, I believe, will be even more challenging in the months and year ahead of us. We would have to work harder to ensure that sufficient jobs are created. We would have to work harder to help workers remain employable. The NTUC co-operatives will have to work harder to fulfil their social role and yet remain commercially viable.
There are many driving forces and variables in the equation that affects the environment ahead of us. Let me point out just three of them.
First, the Chinese economy. The growth of the Chinese market will bring even greater competition for foreign direct investments. In the 80s and the early 90s, ASEAN attracted most of the foreign direct investments. However, the pendulum has now swung in favour of China. China is fast becoming a vacuum cleaner for investments. In 2001, an estimated 47 billion US dollars worth of foreign direct investment went to China. China is also becoming a manufacturing centre for the world. In 1999, China accounted for half of the world's production of refrigerators, one third of the world's production of television sets and one quarter of the world's production of washing machine. China offers a huge domestic market. It has a 100-million strong, and growing, middle class. The whole population of Singapore is only 4 million. The wage costs in China started low and are rising only moderately. Besides wage costs, there is also a deep pool of college-educated engineers and scientists.
While China may sound like an 800-pound gorilla on steroids, there are also uncertainties that could play out to undermine the growth momentum of the China market. The unemployment rates in the rural areas remain high. The banking system in China is mired in debt and it could create significant problems for the economy. Nevertheless, whichever way the China market goes, we would have to closely examine our own competitiveness. Otherwise, we would be squeezed out. At the same time, we should watch out for opportunities: China's growth offers opportunities for new business for Singapore companies.
Second, the security in the region. The war in Iraq looks even more imminent now. When two countries go to battle, there is no telling of how long it would last. If the war is dragged into a prolonged battle, no one knows how other forces, such as religion, would develop. Such a scenario would mean greater uncertainty in our region.
The Bali bombing has dented the investor confidence in our region. We will have to stay vigilant and make sure that Singapore remains the preferred choice for investors coming to the region. ASEAN as a whole would have to pull together to bring investor confidence back to the region. However, it would not be a simple task and it would be one of the toughest challenges that the ASEAN has to deal with since its formation.
Third, the US economy. There are signs that the US recovery may be wavering. Consumer and investment demand in the US has weakened considerably. This is also reflected in the index of leading indicators, which fell in September 2002. There are signs that recovery of the US economy may be losing its momentum. How the health of the US economy pans out will have a significant impact on our economy. What is hopeful is the determination of the US government to tackle its economy.
Responses
Comrades, ladies and gentlemen,
I have started by highlighting the difficulties we have faced this year and by identifying some of the challenges we would face, not because I want to dampen the mood of this dinner event. What I hope is that, as we celebrate the end of 2002, we are mentally prepared that more challenges lie ahead of us.
The response would not be a straight forward one. It would require the various public and private agencies and the stakeholders in Singapore to work closely together. Nevertheless, there are some immediate areas that as a Union, BATU could address.
First, the tripartite partnership framework. Our tripartite partnership between the Union, the Employer and the Government has served us well for many years and has helped us get through many difficult economic situations. The strength of the framework has allowed us to foster a very conducive and stable environment for businesses to thrive in Singapore. This is important because it helps to keep jobs and create jobs for our workers. However, we must not take it for granted. The framework exists because of the relationships and trust the three parties have built up over the years. We must continue to build understanding and trust amongst the partners. As a union movement, we will have to do our bit to bring value to the partnership.
Second, leadership. There is a proverb "An army of deer would be more formidable commanded by a lion, than an army of lions commanded by a stag." As we face up to the challenges ahead of us, we would need good and effective leaders.
It is very encouraging to see so many people who were prepared to step forward to serve at the Union HQ of BATU, at the last round of the delegate conference of BATU. I would like to congratulate those who have been elected. The responsibilities will be heavy and the work will be challenging. However, you will be rewarded by knowing that you made a difference.
Third, question assumptions. We all know the Beatles. When the band approached Decca Recording Company for a recording contract in 1962, this is what the Company said: "We don't like their sound, and guitar music is on the way out." On hindsight, we know that this was perhaps the biggest mistake they made. By the end of 1962, Beatle-mania had erupted in the UK. In 1964, just two years later, the Beatles achieved the unprecedented - occupying all five of the top positions on Billboard's Top Pop Singles chart. Let me give you another example. In 1977, Ken Olsen, the President of Digital Equipment Corporation said, "There is no reason for any individual to have a computer in their home." This assumption might have been seen as a sound one at that time, when the cost of a computer ran into the millions. However, by taking for granted that this assumption would remain true always, cost the company dearly. By 1989, an estimated 21 million personal computers personal computers were being sold annually worldwide. By 1996, this figure had increased to almost 93 million annually. The company was not ready for this and as we know today, Digital Equipment has been bought out.
These anecdotes tell us that we need to constantly question our assumptions and challenge our view of the world. We must develop the instinct to anticipate changes, the habit of welcoming changes and the ability to execute changes. Otherwise, we would be rendered irrelevant before we even know it. Similarly, as a trade union movement, we must also constantly challenge our own assumptions and uncover blind spots. Otherwise, we would lose our relevance to our members and lose our value in the tripartite partnership.
The Role of NTUC and its co-operatives
NTUC as a national congress of trades union will have a key role to play in these times of uncertainty. It would have to continue to speak up and act for the interests of workers and its members. When the Government announced its intention to raise the Goods and Services Tax, GST, by two per cent to five per cent, NTUC raised its concerns over the impact of the increase on workers, especially in these times of economic uncertainties. It is encouraging to see that the Government had taken our views into consideration, when it reviewed the implementation schedule of the increase, due to the unexpected economic results.
The uncertain economic environment also places significant challenges on our NTUC Co-operatives. They would have to balance between their very important social roles and the need to remain commercially viable.
Last week, the Far Eastern Economic Review (FEER) ranked NTUC Fairprice as one of the top ten companies in Singapore in its annual rankings. Fairprice rose from seventh place last year to fifth place this year. The most significant point was what FEER said about Fairprice. It described Fairprice as a "supermarket chain with a social conscience." It lauded Fairprice for helping Singaporeans tide through the recession.
NTUC Fairprice has announced that it will be absorbing the GST increase on 400 essential items for one year. Since the GST will go up one percentage point in January, not two percentage points, NTUC FairPrice has decided to take one step further - it will be absorbing the GST increase on not just the 400 essential items, but all items, during the festive season sales for the whole month of January 2003. This is expected to cost Fairprice more than $1.5 million in January 2003 alone. In total, Fairprice estimates that it will absorb up to $5 million in GST for the whole year.
But Fairprice isn't the only co-operative helping Singaporeans in these difficult times. Many of our NTUC co-operatives will be absorbing the GST increase - NTUC Healthcare, Foodfare, Childcare, Income and Club. The co-operatives share a common vision of helping Singaporeans stretch their hard-earned dollar. That common vision binds us together and is a key source of strength for the labour movement.
Conclusion
The strength of our union movement lies in our common belief that the union movement exists to take care of each other. It is the mutual help and commitment that makes our collective voice a strong and enduring one. Collectively, we would be able to face up to the challenges that are bestowed upon us in the months and years to come.
I wish all of you a pleasant evening.
