Tuesday, May 01, 2012

Raising productivity only way to sustain better wages, says PM Lee

SINGAPORE: Prime Minister Lee Hsien Loong has made another urgent call to raise productivity as the country faces domestic constraints.

He said that's the only way to sustain better wages.

In his May Day message, Mr Lee said raising productivity is more important than ever in a maturing economy, with limited land and manpower.

Besides an uncertain external economic environment, Singapore is also facing domestic pressures that will slow the country's growth to between 1 and 3 per cent this year.



Mr Lee said Singapore is running up against land and manpower limits.

The move to cut back on foreign labour may cause some companies to hold back expansion plans and some may re-locate their operations out of Singapore.

While the labour market remains tight, that is, Singaporeans can easily find jobs at all levels, Mr Lee said this will only push wages up in the short term.

He said it would be dangerous to assume complacently that wages can continue to rise indefinitely, just by squeezing on foreign workers.

Mr Lee explained that higher wages push up business costs, affect competitiveness and may cause inflation.

Singapore's Consumer Price Index rose by about 5.2 per cent in March 2012, compared to a year ago.

More than half of the "headline" inflation rate came from higher COEs for cars and the effect of higher market rent on houses.

Singapore hopes to turn the tide by raising the country's productivity to 2 to 3 per cent each year, over the next decade.

This will help grow the economy by 3 to 5 per cent annually.

Mr Lee pointed out that this will require the effort of everyone - workers, employers and the government.

He said workers should also be adaptable and flexible, keen to re-skill and willing to cross over to new, growing industries.

While companies, he said, must support this transformation.

Mr Lee said employers should look beyond short-term profits, treat employees as partners and invest in their development.

Unions too must work hard to organise workers who need help in this uncertain environment.

"Even though we expect our economy to grow less quickly in future, our shared goal is unchanged: to improve the quality of our growth. We want Singapore to be a competitive economy and an inclusive society, where the benefits of growth are distributed fairly and widely. We want this to remain a vibrant land of opportunity which continues to attract investors, and which helps Singa?poreans to create a brighter future for ourselves," said Mr Lee.

Raising productivity has been a running theme for the May Day messages put out so far. In fact just on Sunday night, the government announced an additional funding of S$70 million, over the next three years, to the Inclusive Growth Programme aimed at helping companies transform their business to increase productivity. All this, with the aim to raise the wages of the Singaporean worker.

- CNA/de

View the original article here

Source From Channel News Asia

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