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Slower economic growth

By LIM SUE GOAN
Translated by Soong Phui Jee
Sin Chew Daily

Singapore has always been more sensitive to global economic trends and with the current European and American debt crises, it has decided to tighten controls on mid-level foreign workers.

Singapore's economy grew by 0.9% year-on-year (y-o-y) in the second quarter (Q2) of 2011, a contraction of 9.3% from the preceding quarter. Raising the threshold for foreign worker employment is a precautionary measure to protect Singaporeans.

As for Malaysia, it is also having a slower economic growth with its economic growth moderated to 4% y-o-y in the Q2 of the year, after a revised growth of 4.9% y-o-y in the Q1.

In fact, the slowdown is traceable. The vehicle sales in June were down 22.62% from 54,005 in the same month last year to 41,790 units this year. However, the authority refuted by blaming the disruption in supply following the earthquake in Japan in March and delays to vehicle registrations due to the amendments made to the Hire Purchase Act 1967 (HPA).

Economic slowdown is an established fact and we should now get prepared to stimulate domestic demand, so that we can achieve the full year growth target of 5%.

Singapore is trying to reduce foreign workers because the world economy is expected to face another recession, which could affect employment opportunities.

Prime Minister Datuk Seri Najib Razak has also said that if the debt crises in Europe and the US were to develop into a world economic recession, Malaysia, particularly the manufacturing sector, would surely be affected. Layoff might be necessary if there is a decline in exports.

The 6P amnesty programme is expected to register 2 million legal and illegal foreign workers. The government should seriously study whether the country really needs so many foreign workers. If unemployed workers are not sent home to reduce the number of foreign workers here, they might affect the people's interests once there is an economic downturn.

As for stimulating domestic demand and consumption, the government has high expectations over the Economic Transformation Programme (ETP) and other major projects, including the MRT system and the Greater Kuala Lumpur plan, hoping that these projects could support the economy of the second half year.

However, the effects of the ETP could hardly take place in the short run and they might ferment only in the last quarter. Meanwhile, the private sector would also continue to observe without taking any major actions due to the uncertain external environment.

The federal and state governments have issued at least RM500 for each of the 1.3 million civil servants in mid-August. It has indeed supported the retail industry. Moreover, the country will celebrate the Hari Raya and Merdeka Day at the end of August and thus, the figure of August and September should not be too embarrassing.

However, October might be a quiet month. According to a report, the 2012 Budget to be presented by Najib on 7 October would focus on how to alleviate the people's burden.

The Budget is expected to aid urban low-income earners, issue food stamps and help vulnerable groups cope with the rising cost of living. The rice coupon system proposed by the Agriculture and Agro-based Industry Ministry two years ago serves as the best example here.

The greatest burden of the people comes from vehicle and housing and thus, the government should start from these aspects.

Since we have no way to escape the economic slowdown, let's just face it courageously!

 

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