Singapore expects to have most, if not all, of its economy back on track by June, trade minister Chan Chun Sing said on Monday.
Singapore imposed restrictions in early April to blunt the spread of the outbreak, and temporarily closed schools while asking most offices to switch to remote work. Starting Tuesday, those measures are set to be eased in three phases.
“By phase one, we will have 80% of our economy all back on track. Then the last major remaining sectors will be retail and F&B (food and beverage), which we hope to reopen by the end of June,” Chan told CNBC’s “Squawk Box.”
The city-state has one of the highest numbers of coronavirus cases in Asia, with more than 34,800 people infected so far, according to data from Johns Hopkins University. Most of the cases are associated with infection clusters in dormitories that house foreign workers who carry out labor-intensive construction jobs.
Some people will be allowed to return to work in the first phase, though businesses are still encouraged to work from home whenever possible. Schools will also be reopening though students will continue learning from home on some days.
Chan said the government has worked with companies and workers to put in place the necessary measures for the work environment, transportation and social distancing in order to “open safely, and most importantly, to open sustainably.”
Singapore will monitor the effects of increased activity in the first phase and if the community infection rates remain low over the subsequent weeks, it would move on to the second phase.
Lessons learned
Chan said that the transmission of the virus through communities has stabilized in recent weeks, but it would take Singapore more time to clear through the worker dormitories and identify all of the cases, including the asymptomatic ones.
Singapore was one of the earliest countries outside China to report cases and it was initially seen to have contained the infection. However, large outbreaks in the packed dormitories led to a spike in infection cases, which triggered questions about the living conditions of foreign workers.
Chan said Singapore has to go beyond just the size and hygiene standards of those dormitories as the country continues to assess the situation. The working environment, social mixing outside work hours also need to be looked at to ensure a safe return to work, he added.
Both the government and society-at-large responded to ensure migrant workers who contracted the infection are well taken care of, Indranee Rajah, minister in the Prime Minister’s Office in Singapore, told CNBC’s “Street Signs” on Monday.
She also responded to worries among some parents about the reopening of schools and said that adequate measures will be taken to keep students safe on school premises. Rajah explained that Covid-19 will likely stay for a considerable period of time, or at least until a vaccine is found, and it will not be possible to keep education institutions closed for prolonged periods.
“You can’t keep children away from their education for a whole year,” said Rajah, who is also second minister for finance and education. “What we can do is to make sure measures are taken to ensure that the children are safe.”
Most countries that appear to have successfully contained the infection now worry about a second wave of community transmission. South Korea, for example, reported a new infection cluster recently, pushing authorities to reintroduce social distancing measures.
Chan said Singapore’s safe resumption measures are meant to allow the government to zoom in on any particular infection clusters that might appear as the economy reopens. “If something emerge(s) again, we can close down that particular sector, isolate the problem and not have to close down the entire economy again,” he said.
Looking ahead
In a Facebook post over the weekend, Chan announced that the city-state secured 13 billion Singapore dollars ($9.2 billion) worth of investment commitments in the first four months. That amount exceeded its full-year target of between S$8 billion to S$10 billion.
The commitments would be realized over the coming years but Singapore is confident of having a rolling stock of investments coming in and a rolling number of jobs being created over time, the minister told CNBC.
“I think this speaks well for Singapore because increasingly, the competition for investment is not just based on price or taxes but increasingly it’s more important for us to focus on the intangibles” — such as long-term policies, intellectual property protections and a safe harbor for talent and businesses, he told CNBC on Monday.
Still, the short-to-medium term outlook for the economy, which is heavily reliant on international trade, remains vulnerable. The trade ministry’s projections estimate Singapore’s growth will shrink by between 4% and 7% in 2020. To mitigate the impact of Covid-19, the government announced four successive stimulus packages worth almost $70 billion.
When asked if there were plans to introduce further support to help the country tide through the economic fallout, Chan said the government was focused on ensuring the various measures announced were implemented well.
“We are confident that we have the resources to tide us through. We are thankful for our previous generations who have saved up for this rainy day. And this gives us great confidence that we will not be fiscally constrained, like some other countries,” he said.