PM Lee Hsien Loong at the Dialogue With Women Professionals (Oct 2009)

This evening – Up Close and Personal, the topic is Employment Opportunities in Singapore. I think it’s a timely one because the state of the economy is on the minds of many people. In the first half, it contracted by 6.5 per cent which is a very severe drop but fortunately the measures which we took, the Resilience Package, helped us to avoid the most painful consequences and in particular to hold down our unemployment rate. Actually if we look at the absolute numbers, local employment went up, more Singaporeans had jobs than a year ago, and went up by 7,000 jobs this year despite the very difficult conditions. Although there were job losses, many of the jobs lost were held by foreign workers and the total number of foreign workers went down by 21,000 which helped to buffer Singaporeans from the impact. So we had been on a bungee jump, we have gone down, hit the bottom and we have come back up, now we are looking ahead and trying to decide what’s going to happen. I think the situation is looking more stable.

Globally, the US economy is stabilising, probably come out from the recession. China has kept its growth up by pump-priming, not least because today is the 60th anniversary of the PRC, so they want to make sure that is going to work out. But whatever the reasons, overall as the IMF has just said in a report today, the world economy is picking up faster than it had expected. Within our region in Southeast Asia, our neighbours are keeping things on an even keel. Indonesia is showing positive growth largely due to domestic demand, even Vietnam is returning to pre-crisis growth rate and Vietnam is one of the markets where there is potential for us to do business in future. In Singapore, the vital signs for our economy are not bad. Trade is steady month-on-month; our manufacturing is going up, holding up and helping our employment creating new jobs, and of course other new jobs are being created. In fact, some companies are short of workers. IRs, for example, which are coming onstream are hiring workers and finding difficulties doing so and having to get help from e2i or NTUC to get workers to work with them.

But, of course, it does not mean that the sun is shining again as some challenges remain. We are not sure whether after the governments’ stimulus packages run out, the developed countries can continue to grow. Because the governments have spent such humongous amounts of money, tax cuts, vouchers, car trade-in discounts, television set, washing machines, the whole kitchen sink. So having done all that is not surprising that people are spending some money and the economy has picked up but when that runs out, are you prospering because you are creating wealth, or are you prospering because the government is printing money, and that is yet to be seen. There are still some risks of what people called a W-shaped recovery. That means you have gone down, you come back up and the W means goes down again and come up again. It is not the WIN. But I think it is something which we have to watch for. There is some risks of it not the most likely probability but it could happen. But anyway even in a good scenario, we are not expecting dramatic growth, we hope we will have some positive results to show but we must expect our unemployment to take some time to come down to pre-crisis levels.

The immediate decision before us is to what to do when the Resilience Package measures come to an end. And in particular, what to do with the Jobs Credit which has helped companies with their cash flow and their bottom-line and helped to save jobs during the first half when things were quite scary. I know that employers are anxious to know the Jobs Credit will be extended and if so, then what for. If you read the newspaper, you will know that. In fact, they are not anxious to know, they are anxious to request. Because as the scheme now stands, the final payment is in December, yet to come but that payment depends on the third quarter payroll. That means July, August, September and today is the first of October, so the fourth quarter. Your labour cost calculations, are you going to get Jobs Credit or not, they do not know yet and that will affect their calculations, hiring, firing, expansion and so on. I think the unions are equally keen to have some certainty on this issue and I can tell you, we are reviewing this carefully and we will decide soon. I am not ready to announce it tonight but we will take into account the economic outlook and employment situation. We will have the third quarter, at least flash numbers, published in a couple of weeks’ time, and I hope we will be able to settle this and announce this when we go to the NTUC Ordinary Delegates’ Conference which is in two weeks’ time on the 13th of October. But beyond these micro decisions of timing to continue, to extend, to adjust or not extending the Resilience Package, we have to look to the longer term. We have to prepare ourselves for the world beyond the crisis when there will be new opportunities but of course also more competition and greater uncertainty. We have an economic strategist committee which Tharman has been chairing, which has been quietly making progress, thinking about the way ahead for the Singapore economy. I think they will have something to report and to recommend before the budget next year which is their objective but two things are quite clear even before they report anything. First, that our economy must continue to globalise, and secondly that we have to maximise the potential of every Singaporean and raise our productivity. And both these points have implications for women in Singapore.

On globalisation, we really have no choice because we are such a small city state plugged into the world, we have made our living as a transport and communications hub. Companies come to Singapore to service the region and to set up their headquarters and their control tower operations here. So they are here, visibility all over Asia – manpower, logistics, financing, transportation, production, the whole lot. And we in Singapore thrive because we are linked up with the whole of Asia and beyond that with the whole world. And if we are going to continue to prosper, we have to continue to do that and if we are going to globalise and to link up, that means there will be jobs available for us in Asia, around the world and that means also that Singaporeans must be willing to take up jobs which are in Asia and around the world. And that means both men as well as women. We have to travel frequently to manage overseas operations, oversee what is happening. Some families will be based outside Singapore and this will inevitably cause stresses and strains with the families because either the family, including the children, will have to move — based overseas, change schools, get use to different environments, climates - or possibly the family will be geographically split and the spouse and children will remain in Singapore and one partner will be overseas, either way there are difficulties. It is not so simple a life as living in one place and catching a bus or a train to work everyday. Thankfully nowadays there is technology to make it a little bit easier. There is Facebook, there is MSN, there is Skype, all those of you who have family overseas will know what Skype is. Or even simple SMS. And there is nowadays in Asia low cost carriers allowing cheaper, more frequent travel. But still the demands of such a lifestyle will be hard on the family which may have to endure frequent or lengthy separations and there are really no easy solutions and families have to work through this period and adapt and accommodate.

So that is the first reality about the future prospects for us. The second certainty if we look forward in our economy is that we have to raise our productivity and increase labour participation which means more people have to be working, which means more men, which means more women, and more older men and women. We cannot keep on growing just by bringing in more and more foreign workers to supplement our workforce. We need foreign inflows, we need some of them now, we need probably a few more as time passes, but we cannot just expand by having more and more. So instead if we are going to grow and not just be constrained by to be what we are now and nothing more, we have to raise our productivity, depend less on unskilled workers and especially unskilled foreign workers, which means we have to constantly restructure and upgrade our economy and that means Singaporean workers have to continually upskill and reskill and that is the challenge. From the point of view of numbers, we need to increase the participation of our local population and as I said the women and the older men and women who are not working in as big numbers as the men in Singapore. Over the years, we have been able to make progress on this. Our female labour force participation rate has gone up, that means the proportion of adult women who are in the workforce and over the last 20 years has gone up by 12 percentage points, now more than half of adult women are working or 56 per cent of females, which is not bad, it is comparable to the developed economies which are mostly 50 plus per cent also. Although the Scandinavian countries, the Nordics, are 70 plus per cent but I think the Nordics are different class and I do not think we can quite compare ourselves to them. So it is not bad, I think we will continue to make gradual progress but there is still room for improvement and in particular as I told the recent conference we had about women, we need to have a two-hump camel. You know what the camel is, it is a graph which shows participation by age, so as when you are young you are in school, as you leave school, and enter the workforce, the proportion working goes up, then people get married or have children and then the proportion comes down with age and in the developed countries as their children grow a bit older and they are freer and they can come back into the workforce, you have a second hump and it comes down again when they retire. So in Singapore, we follow this curve, we go up, we come down, we do not quite make a second hump. It makes a little beginning of a hump but I watched it carefully, every year I look at the chart, no sign of this second complete participation and it is something which we ought to try and achieve and facilitate, not just exhorting people to come back to work but facilitating it, making it easier for women to have children in playschool or in day care, childcare, making it easier to have part-time work, making employers understand that it is worth their while to make it a mother-friendly workplace environment. So if we have to express milk or you have to take time off for sick kids, well there is understanding and adjustments can be made.

We are making some progress and I think as I said the numbers are going up of women in the workforce and increasingly we have women represented at the senior levels of the workforce. So in the private sector and professions, we have many directors, CEOs, senior executives. In the civil service, we have a good number of permanent secretaries who are now women. I put down five in my draft but Lim Hwee Hua told me better check and indeed I was mistaken, actually we have six because today we appointed a new one. Ms Ow Foong Pheng is a second perm sec in the Ministry of Trade and Industry effective today. I assure you it is just a coincidence. But it shows that we do have women and they are rising in greater numbers and in politics too. In Parliament, we have 17 out of 84 elected MPs who are women which is not bad and we will try and do better. But despite this, if I speak candidly with you, I have to admit that it is still harder for women to combine careers and family than it is for men. In the civil service, women rise to the top but we know that there are many high potential women officers who take time out to look after their children, to have children and look after them. And when they come back to the workforce, they have to work doubly hard to catch up. Or they decide to accept the position and they make a trade-off, three-quarters job, three-quarters family. Some go out to the private sector but even among those who go out to the private sector, we can see that a good number opt for less stressful careers and sometime work part-time so as to have more time and energy for the family and therefore, in the higher ranks, women are still under represented. I do not think this state of affairs will change quickly but we must persevere to make adjustments in our society to persuade organizations to adopt flexi-work schemes so that it is easier on the employees and women employees, to encourage the men to share the responsibility for housework and responsibility for bringing up the kids in the next generation and progressively to move to a truly shared parenting arrangement and a more positive environment for families to have more children, because we would like you to have to take good care of your kids but we also like you, by which I mean both the men and the women, to have more kids. And we have to address this urgently. Sometimes, it sounds ‘Mak Nenek’ (grandmotherly) but we have to continue saying this because the low TFR is a major concern. Low Total Fertility Rate.

We have had three marriage and parenthood packages so far and the most recent package was last year. Sixteen weeks maternity leave, half paid by the government, baby bonus enhanced even from the first baby to help with the cost of bringing up the children, tax relief to lower the opportunity cost of having children particularly for those who pay quite a lot of tax and more subsidies for childcare so that mothers can go back to work sooner and not be out of the circulation longer and then find it harder to come back. But unfortunately despite our enormous efforts, the mountain has moved, but the mouse has not come out. There are no signs yet of the TFR bouncing back. Many men and women are still remaining single or marrying late. The most I can claim is that the total fertility rate is not going down as drastically as before. Before the package, it was 1.29, after the package it is only 1.28. So if we want to comfort ourselves then we say well the economy took such a plunge, naturally people hold back but I think even when the economy recovers, it is going to be quite difficult to push the TFR up to 1.6 which is where some European countries are, or even more ambitious to 2.1 where we can actually replace ourselves. And this shortfall is a very serious one. Let me show you just a back-of-the-envelope calculation. It is not sophisticated mathematics, it is just to give you a sense of the numbers. Let us say we want four million Singapore citizens, right? Today I have five million people in Singapore, of whom maybe 3.2 million are Singaporeans and let us say I want four million Singaporeans, which I think is not an unreasonable target to aim for. Average life expectancy now is 80 years old, just above, but about 80 years old. So four million people each one living for 80 years. Every year I need how many babies? Four million divided by 80 — I need 50,000 babies. I see Cynthia has a calculator there. I need 50,000 babies. Every year I am getting today 32,000 babies born. So that means every year, I need 18,000 more citizens from somewhere, either the babies come up or I have to bring in about 18,000 new citizens. And that is a very powerful reason why we need to continue with emigration. Last year, we had more than 18,000 new citizens, last year we had 20,000 but if you look at the last decade or so, we are nowhere near making up for this numerical shortfall in our replacement numbers every year. But, of course, if you do bring in 18,000-20,000 new citizens a year, we have the challenge of integrating them, fitting them in, having them adapt to Singapore and our customs, having Singaporeans get used to them. All of these takes effort and therefore we have to track the inflow, manage it, calibrate it, make sure that it is not so fast that it is causing indigestion and we cannot manage it and I talked about this recently at NTU, and we will watch the inflow and we will work harder on integrating the new citizens. But these numbers show you quite starkly what the reason is that we are going in this direction. These challenges I am sharing with you. I fear that at the end of this talk when we have the Q&A, you will stand up and ask me, what is the Government going to do about it. And the answer really is these are challenges which cannot be solved by government action alone, whether it is economic crisis, whether it is a population shortfall, we have government policies, we have measures, we have incentives, we have adjustments as we go along, but it depends on Singaporeans tackling them together whether it is deciding to go for training, whether it is deciding to get married, whether it is deciding to have more kids or fewer kids, whether it is deciding to get along, trying to get along with your neighbours and make friends with him, new arrival or not. So I am happy to see that this evening so many of you have come who are interested to know about these issues and help us to find good solutions and I look forward to having a dialogue and hearing your solutions to these problems.

Thank you very much.