Thought of the day

I thank whatever gods may be / For my unconquerable soul. / I am the master of my fate / I am the captain of my soul. ~William Ernest Henley, Invictus

Government's promises are like the Ringgit, they depreciate with time.

Tuesday, August 18, 2009

National Day Rally Speech (Part 1 - State of the economy)

PM Lee: This is a significant year for Singapore. It's the 50th anniversary of our self-government. It's also the year when we've been hit by the most serious recession in half a century. Day to day we watch keenly the economic numbers - growth data, unemployment data, trade data, all the statistics. It's like monitoring the temperature chart of an H1N1 patient.

But we need to step back and see things in the longer perspective. Over the last five decades we have met many challenges successfully. And when we started out we had much less than we have today.

Singapore achieved self-government on 3 June 1959. That evening Mr Lee Kuan Yew and his new PAP team held a huge rally on the Padang. And MM spoke.

He told the crowd: "Once in a long while in the history of a people there comes a moment of great change. And tonight is such a night, such a moment in our lives." It was quite a different mood from tonight's National Day Rally. It was a moment of great excitement. And it was also indeed the start of a long period of enormous change for Spore. In the course of the next 50 years we developed our economy, we created jobs for Singaporeans, we housed and educated our population, we forged our different communities into one united people.

And therefore we are quite confident that we will overcome this present economic challenge. We need to tackle the immediate situation. But we also must also look ahead to the longer term. And provided we can do both our future is bright.

How can we do this? Tonight I will talk about four issues: the economy, healthcare, harmony in our society and shaping Singapore together. Let me start with the economy.

The global economic crisis has been a major challenge for us. The first hint of this was two national days ago when it was just one little black cloud on the horizon. And as we prepared the National Day messages, we inserted a warning just to tell people, watch out, keep an eye open.

Last year we could see the storm approaching. So I spent some time in the rally explaining the risks. But as it turned out it was much much worse than anybody had expected. Certainly much worse than we had expected. Dec, Jan, Feb - to see our GDP go down -10 per cent, something unimaginable.

Now the eye of the storm has passed. First half we did - 6.5 per cent. Less bad than we had feared although usually you wouldn't have a minus sign down there. But now the global situation is stabilising, and including in the US, where the problems are the largest. So we're looking ahead cautiously towards the rest of the year.

Our labour situation has stabilised. Unemployment is not too high. Companies, some of them are hiring again, although still in not large numbers. Third quarter should be all right. Beyond that the outlook is still not so clear. No signs of Christmas orders pouring in yet. And there are some companies which are still on short time, compulsory leave, shorter work week and so on.

So what's happened? Their output has gone down, their headcount hasn't gone down, so they are really carrying some surplus workers for the time being helped by the Spur programmes, spent sending them for training, helped by the Government carrying the Jobs Credit cost for them. It's all right for the short term but it's not clear how long they can hold on to these extra workers because if the recovery is delayed, then sooner or later they'll have to right-size, they'll have to let go of some of these workers and there could be more job losses. So we have to be prepared. We will also see some job losses from restructuring. As companies move upstream, they will shed some old jobs, old jobs keep on going to other countries, lower cost, maybe not quite so skilled but improving and we moving upstream. So as they lose their old jobs we hope they will continue to upgrade their operations here, create new and good jobs to replace the ones lost.

For example, Seagate is closing their hard disk drive assembly factory by the end of next year. It was in the news a couple of weeks ago. Seagate is a very big employer, has been a very big employer in Singapore for many years. So they are closing their disk drive assembly factory, losing a couple of thousand workers but they will still employ 6,000 people here in high-value work - hard-disk media manufacturing, R&D, international headquarters operations. So instead of making the disk drive, the box, you're making the media, the material on which the recording is made, the high-tech part of the box.

So, my overall assessment of the state of the economy is that the Resilience Package which we introduced in January is working, no need for a new prescription now. Before the end of the year we will review and we will decide what we need to do for next year.

Beyond this year, I expect the global recovery to be a subdued one. It will pick up but it will not pick up in a hurry. But even in that environment, it doesn't mean that we can't grow because we are small and the world markets may not be expanding fast but we can grow by sharpening our skills, enlarging our market share. And even now we can see good signs. You can call them green shoots if you like but good signs of what's happening because local companies are doing well, we have new business areas blossoming nicely, multinationals continuing to invest good quality projects here and workers re-skilling and upgrading in Singapore.

Let me give you some examples, just briefly.

Local companies with strong capabilities are building, expanding, gaining a march on their competitors, like Hyflux. I recently met an engineer from Hyflux at a function. I asked how is the company doing. He says it's doing very well, many opportunities to build water facilities all over the world. I asked him which is your most challenging project. He thought a while, he said Algeria. They're building the world's largest desalination plant, seawater desalination plant in Algeria, not in a big city but at a small village next to the Mediterranean Sea, in the middle of nowhere. That's a picture of the middle of nowhere. The nearest town is three hours' drive away on a bad road. So I said can you get Singaporeans to go to these places to stay? He said yes. We have 22 Singaporeans there working, including two women. They got spunk.

I said what do they do, how do you, what happens after you finish working in a place like that. Where do you live? Said, well, they live in dorms, so these big buildings must be the dorms and as for entertainment, no alcohol because it's an Islamic country, so they play basketball and computer games. And here they are.

"Hyflux team in Algeria wishes everyone in Singapore a happy National Day!"

So with the Internet we can still talk to them. I hope they're listening over webcast to the speech tonight. Because of this and other projects, Hyflux is doing well & still hiring engineers & it shows that there's still work to be done, provided we are prepared to rough it out and take the jobs which are available, which are good jobs.

We are also growing entirely new activities here, like interactive & digital media, IDM. What does it mean? Games, visual effects, animation.

When you go to a movie and you see fireworks or you see explosions or you see a storm or even you see a beautiful actress, it may not be real, it may be the computer graphics engineer hard at work. And it may be a Spore engineer hard at work. The leading players have established operations here, Electronic Arts. It's the world's largest game company. They make 'The Sims'.
Lucasfilm is here from the US and we've got European and Japanese companies too. And the pool of local talent is growing. All our polys, the NUS, NTU, NAFA, LaSalle, they are all offering courses because the demand is there, the students want to do it and the students are doing quite interesting work. Nanyang Poly final year students, last year they did a project, PC racing game, F1 Marina Bay. That's one scene at Supreme Court and I think they have another scene to show you which is the Durian.

So we are producing game programmers, visual effects artists, computer graphics artists, all in demand. It's still young, green shoot, but it's produced some quite impressive work. Lucasfilm, they make one production here from concept to completion. It's called 'Clone Wars: Jedi Alliance'. This is Yoda. If you know about Star Wars, you will know who he is. I think we will produce more of such movies & this should grow into another interesting segment of our economy.

We are also attracting MNCs to Singapore, still. They are using this downtime to think deeply about their future. They are keen to do more in Spore, in Asia, which they see as a key growth engine for the world and they see Singapore as a base for them to do their Asia business.

So EDB has been engaged these companies in a strategic dialogue to encourage them to put their high-end manufacturing, their HQ operations, their 'control tower' functions here to service the region, control tower like Changi Airport's control tower tracking what's happening all over Asia, logistics, money, manpower, research or production, the whole lot. And EDB is working out with them 5 to 10-year plans.

For example Rolls Royce, they make jet engines, marine engines. They moved their marine division global HQ to Spore this year, not just an Asian HQ but for that part of the business, their global HQ, controlling things all over the world is based in Spore. And they are also building a facility here to test and assemble Trent aero engines and to manufacture the fan blades.
This is the engine which they are making in Spore. It's meant for their big wide-body jets so if you are on an Airbus 380, you may have one of these. It's taller than the man and the fan blades, these massive things, are high tech products which they are going to make here and their first factory outside the UK to do it. And it's going to give us 500 mostly skilled jobs when fully operational, in Seletar Aviation Park.

So we are getting good projects, long term projects here and one key benefit and one key strength we have in attracting these projects is the Singapore brand name. It benefits local companies when they go overseas because they say, ah, you are from Singapore, I can depend on you, and it gives overseas companies confidence when they come here and invest here.

So we should never compromise or lose this advantage. It's not just a name but it depends on a united people, best workforce in the world, good leadership, first class govt. When companies like Rolls Royce decide to site projects here and put a plant here, they spent years to study and decide but they are really betting on Singapore, not just for five or 10 years but for the next 20 or 30 years. In other words, the next four, five or six elections. So take it seriously.

As we transform our economy workers will need to update and adapt themselves. The government is spending millions of dollars on programmes to help workers to do this, to upgrade within their jobs if they've lost jobs, to help them to become job-ready to learn new skills, to find new jobs.
The facilities are all there. The programmes are there. Please take advantage of these opportunities if you're out of a job, even if you're in a job. Don't wait till you're unemployed. It may mean effort, it may mean a mindset change. But we have progammes even to help people to make this mindset change, to overcome the psychological hurdles, to rebuild their self-confidence, improve their interview skills and to give one another encouragement and moral support. I've a picture here and this is a prog, PMET career workshop run by one of the CDCs.

And I've watched the participants. It takes a while to overcome the shyness, the embarrassment, the awkwardness to let your hair down, to speak and to be prepared to take a new path. But it's worthwhile and it's productive.

Let me just quote you one example from Northwest CDC career centre. This was a person, Mr Mohd Amin, who was 48 years old when he was retrenched. And he went for help.

And this is what he told us afterwards. "...After the retrenchment, I feared I can't find another job because of my age...all interviews I attended were unsuccessful for three months. I was very worried as I am sole breadwinner with three schooling children. The career centre coached me to learn a skill and start a new career path. I felt supported... I attended the job placement event and I successfully found a job as an Enforcement Specialist. The training allowed me to do my job confidently. I'm doing well. I am so happy now as I am earning more than before."

And finally the message: "I will ask my friends to go to career centre for support and help. Tell them to be flexible and not choosy."

So that's a real message. I think it's a convincing one. We should invest in this and do more. And we will enhance the training infrastructure to support continuous training and re-training which we will need to continue to do even after the recession.

We have currently almost 50 training centres scattered all across the island. There's great demand. Many of them are bursting at the seams. So we will invest more and build two national Continuing Education and Training campuses. One will be the East Campus at Paya Lebar Central.

The other one is the West Campus at Jurong Lake District. Next to MRT stations, convenient for workers. And they will become one-stop shops for training and retraining, and job matching. And I think we will be able to get even more workers helped and trained. MOM (Ministry of Manpower) will give you more of the details later on.

Because of the way we've responded comprehensively and decisively to the downturn, we can be confident of our future. It is a deep trough, but we are coping with it. It's taken quite long. It may take some time more. But eventually the global economy will turn around, and Asia will sustain its recovery. And by then, our new strategies, our new investments, our workers' upgrading will have taken effect. And we will be ready to pick up strongly again.

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