Dear comrades, a very good evening to all of you.
It is my pleasure to be here at this Garden Reception for the Engineering Cluster. It is an opportunity for interaction, and exchange of ideas. However, it is different from the many other opportunities for doing so, because here the atmosphere is relaxed and casual.
As you know, Singapore’s labour market was adversely affected in 2001 by the global economic slowdown exacerbated by September 11’s terrorist attacks. The Singapore economy contracted by 2% in 2001 after achieving 10% growth in 2000. However, we saw an improvement in the fourth quarter, with a growth of 5.6% on an annualised quarter-on-quarter basis, after three consecutive quarters of decline. Many companies reduced or froze recruitment, and a fresh round of retrenchments took place. Job vacancies fell to a record low. Unemployment was at its worst for the past 15 years. Although the lower skilled workers were the hardest hit, none were spared in the current downturn. Many white-collar workers see themselves affected by either pay cuts or retrenchments.
You may be asking yourselves, how was the Engineering cluster affected then ? Well, according to the Economic Development Board, 2001 was a good year for the marine industry. Singapore-based shipyards captured more orders for platforms and vessels supporting the oil and gas industry apart from the bread-and-butter tanker repairs. In total, the industry achieved an output preliminarily estimated at S$4.03 billion, a record 41.1 per cent growth over the year 2000. Value-added was S$1.3 billion and employment grew to about 25,800. Also with the region’s recovery, the marine sector is expected to grow marginally, with more rigs repairs and building works expected for Singapore shipyards in the aftermath of their recent restructuring initiatives.
As for the aerospace industries, despite the September 11 incident and its aftermath, the aerospace industry in Singapore performed well in 2001. Consolidated 2001 output and value-added was S$3.6 billion and S$1.5 billion, registering growth of 24.8 per cent and 22.2 per cent respectively. At present, the aerospace industry employs some 11,000 workers.
As major engine overhaul and manufacturing projects are in the pipeline, the aerospace cluster is expected to grow substantially over the next few years and boost the manufacturing share of the aerospace output.
There are also growth areas where the aerospace, automotive and marine industries can transit into such as the adoption of clean energy sources and the application of communications technologies. These are opportunities for Singapore to participate in the development of such new-generation technologies.
As for the Electronics & Precision Engineering industries, the Economic Development Board foresees about 14,000 jobs to be created. Out of which, about 62 per cent are professional and skilled jobs.
While many challenges lie ahead of us, the outlook for the Engineering cluster remains cautious as the signs of recovery, though evident, are not broad-based. For the aerospace industry, growth in the short term will be moderate in the aftermath of the September 11 incident, but the long term growth prospects remain bright. The marine industry has order books of about S$5 billion that will be fulfilled over the next 18 months and therefore is likely to show some growth this year. The logistics/SCM industry, being dependent on the health of the global economy, will benefit if the economy picks up. Notwithstanding the prevailing sentiments, employment opportunities are strong for both the aerospace and marine industries.
We learn from the past. The competitive environment is changing all the time. We have to change, to do new jobs.
The restructuring of industries in the past few years has hit many of our workers hard. Some who were retrenched are finding it more difficult to find new jobs. There are several reasons. Let me share some of them.
Firstly, owing to our seniority-based wage system, there is a gap between what employers are prepared to pay and what workers expect. Younger workers are more attractive to employers. Invariably retrenched workers who found new jobs took a pay cut.
Secondly, there is a skills mis-match. Increasingly the jobs that are available require higher skills. Earlier I mentioned that the EDB reports that 62% of the new jobs in the Electronics and Precision Enginering industries are professional or skilled jobs. Not all who are retrenched can be retrained for these jobs.
Thirdly, some workers still think that when the recovery comes, their old jobs will return. So they are still looking for their old jobs. Unfortunately the bad news is that many of the jobs we have lost will not return – they have gone to cheaper locations. What solutions can we find for these problems?
A pay cut for older workers means major adjustments for them and their families. For the lower income, it is the amount of money available for spending that is uppermost in their minds. Therefore should we adjust the CPF contributions for older workers? It is not an easy subject to discuss. We have to look at it considering:
Can the jobs also be restructured, so that with higher productivity they can be paid more? The Ministry of Manpower, together with the Productivity and Standards Board, pushed for job redesign with this in mind. Perhaps a greater push is necessary.
More workers can upgrade their skills. Several programmes are in place for this. Some are quite successful. We should review the programmes, on a tripartite basis, to see how they can be made more effective.
Since not all can upgrade their skills, we will need to attract more investments. There are less skilled jobs created with new investments. So it means that we have to make Singapore a more competitive investment location. This is being studied by the Economic Review Committee.
At the same time, we must drive home the message to workers that they must expect to do new jobs. These new jobs may be in completely different sectors.
I urge you to discuss these issues with your colleagues, and members of your unions.
I wish everyone one of you a good evening ! Thank you !
