Chan Chun Sing On Rushing Economic system Restoration, Reopening Of Borders

Economic uncertainty continues to be a problem for Singaporeans in the fight against Covid-19.

With Singapore's economy hit hard by Covid-19 and set to enter recession this year, Minister of Commerce and Industry Chan Chun Sing said in a Bloomberg interview on Wednesday (May 20) his prospects for the economy.

He said that a faster economic recovery from the Covid 19 pandemic would depend on the availability of affordable rapid test kits and the introduction of a vaccine.

He also discussed how the reopening of Singapore's economy through the gradual opening of the "circuit breaker" and cooperation with other countries to help set up travel corridors can help its recovery.

Here are some key insights from the interview:

Despite the increase in exports, the economy remains at risk

Domestic non-oil exports rose 9.7 percent in April, although this was mainly due to a jump in the volatile pharmaceutical category from a low base in the same period last year.

Despite a surprising increase in exports, the economy continues to face many challenges.

We are still encouraged to see some of the positive first quarter numbers despite the headwind. However, the government is not complacent as the downside risks are still diverse.

– Minister Chan Chun Sing

Singapore's gross domestic product (GDP) fell 2.2 percent year over year in the first quarter due to global restrictions to contain the Covid 19 outbreak. This was the worst performance since the global financial crisis.

It is too early to say whether the worst for the global economy is over, as infection rates are rising again in some places where they were previously under control.

– Minister Chan Chun Sing

The job market remains worrying

Photo credit: Bloomberg

Minister Chan said Singapore's unemployment rate has not increased dramatically, largely due to government support through coverage of labor costs.

However, the government still has plans to announce a program to help new graduates get new jobs, internships, or training opportunities.

"What started as a health crisis has now become a problem with employment and company closures," he said.

"If these two problems are not treated well, it could lead to an increase in protectionist measures, possible contagion effects and more pain in the financial markets."

The massive locks put in place to combat Covid-19 worldwide mean that "restoring lost production and capabilities will take time," Minister Chan said.

The government announced on Monday that it would begin reopening some companies on June 2, causing three quarters of the economy to resume operations.

Sectors such as manufacturing, finance, insurance and wholesale will be able to continue operations.

This would slowly help the economy to recover.

A quick test kit or the introduction of vaccines can strengthen the economy

Credit: Forbes

Minister Chan added that the speed of recovery from the pandemic would depend on the availability of affordable rapid test kits and the introduction of a vaccine.

If one or both of these occurs in the next few months, I think there is a much better chance that we will recover faster.

– Minister Chan Chun Sing

Given that infected people may not show any symptoms, a quick test kit would help resume international travel and many other activities, he said.

In the meantime, the government has pushed activities that require a lot of social interaction into the background, he added.

Working with other countries

Minister Chan said Singapore was considering establishing travel corridors with other countries such as China, Australia, New Zealand and South Korea.

So that important business trips can be resumed, the countries must agree on common protocols, e.g. For example, the number of days required to isolate or quarantine a data subject, and whether this would happen in the receiving or sending country.

He further clarified that key business trips relate to management travel in many multinational companies and skilled technicians who have to maintain critical systems around the world.

He also warned that countries take trade protectionist measures and competitive currency devaluations to revitalize their economies.

In fact, we should strive for greater interdependence for greater resilience rather than independence.

– Minister Chan Chun Sing

The government is expected to release a final first-quarter GDP number on May 26, and then revise its current forecast that the economy will shrink by 1 to 4 percent this year.

Deputy Prime Minister Heng Swee Keat is expected to release details of a fourth stimulus package on the same day.

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