Singapore workers feel the cold wind of change SINGAPORE (Reuters) =97 A fleet of taxis shuffled to and from the=20 headquarters of Singapore Airlines at Changi Airport, ferrying home the=20 latest victims of the economic shock waves rolling over the tiny city=20 state. Like port workers before them and countless others employed at the=20 electronics manufacturing plants now relocated to China, the 414 employees= =20 sacked by the airline on Thursday were feeling the full force of a=20 restructuring that is only just beginning. Singapore's open economy has had= =20 a rough ride over the past few years as first its=20 electronics-export-dependent economy was hit by the bursting of the tech=20 sector bubble and the slowdown which followed September 11, 2001 attacks in= =20 the United States. It had barely recovered last year, when in March the=20 approach of the Iraq war and the devastating outbreak of the Severe Acute=20 Respiratory Syndrome (SARS) virus dealt a body blow to its services sector,= =20 mainly the airline, hotels and retail outlets. "The central problem is that= =20 the economy faces random shocks from outside," said Deutsche Bank economist= =20 Sanjeev Sanyal. "It needs to be more and more flexible to absorb these=20 external demand shocks," Sanyal said. RECESSION LOOMS Singapore narrowly avoided a return to recession when it posted an=20 annualised growth rate of just 0.4% in he fourth quarter of 2002 after a=20 6.6% contraction in the September quarter. The economy shrank by 2.4% in=20 2001. his year a recession still hangs in the balance with most market=20 watchers factoring in a negative result for the June quarter, with the=20 three months to September still hard to call. "The issue for Singapore is=20 of inadequate demand =97 both external and from any policy stimulus," said= =20 Adam Le Mesurier, vice president, Asia-Pacific Economic Research at Goldman= =20 Sachs. While Singapore can do little to change external demand conditions it is=20 also not expected to do much on the home front. "Basically you have to let= =20 the economy take it on the chin, while concentrating on long term=20 restructuring," said Sanyal. This is a very different approach to that=20 being taken in neighbouring Malaysia or Hong Kong, where a bigger fiscal=20 effort is being made to soften the impact of the current slowdown.=20 Singapore's government also suffers from its very openness in that any=20 fiscal stimulus tends to translate into more goods brought in from abroad=20 and more salaries being remitted home by its large imported labour force FLEXIBILITY NEEDED Where efforts are being made it is focused on increasing flexibility in the= =20 workforce and on reducing business costs. Deputy Prime Minister and Finance Minister Lee Hsien Loong has emphasised=20 the need to restructure the entire wage system. In an interview with the=20 Straits Times newspaper on Friday Lee warned that pay packets would no=20 longer be like "an escalator" always going up over time. "If a worker wants= =20 to earn more, it will mostly be because he has become more productive," Lee= =20 said. For Singapore, this is a marked variation on a system which has=20 generally rewarded long service. Another target of the government is civil= =20 service pay levels, which for new university graduates tend to be higher=20 than the private sector in the first five of years of employment. "The gap= =20 may now be too wide for some services," Lee said. Ultimately the=20 government's goal is a more diversified economy powered by twin engines of= =20 manufacturing and services, made up of a mix of multinational corporations= =20 and new start-ups, with a workforce of creative and entrepreneurial people.= =20 It's a long way way from the often over-manned government-linked=20 organisations which characterise the system today. But as Singapore=20 Airlines workers found out this week, that is all starting to change. *************************************************** The owner of Roger's Trinbago Site/TnTisland.com Roj (Roger James) escape email mailto:ejames@xxxxxxxxx Trinbago site: www.tntisland.com Carib Brass Ctn site www.tntisland.com/caribbeanbrassconnection/ Steel Expressions www.mts.net/~ejames/se/ Mas Site: www.tntisland.com/tntrecords/mas2003/ Site of the Week: http://www.carib-link.net/naparima/naps.html TnT Webdirectory: http://search.co.tt *********************************************************