The Covid-19 crisis is definitely dragging the global economy down, including Singapore. The Gross Domestic Product (GDP) falls between 4% and 7% in 2020, and it had previously projected a contraction of between 1% and 4%.
Singapore faces its sharpest contraction since independence after the city-state warned that its economy could shrink by 7% in the midst of the pandemic. Moreover, there are 32.343 cases in Singapore, and it is one of the highest rates on a per capita basis in Asia.
The dormitory residents accounted for more than 90% of total infections. It’s because of the poor living conditions of Singapore’s migrant worker population, who reside in crowded dormitories where the largest cluster of cases has been found.
Authorities have warned the public to stay at home and avoid meeting with individuals outside their households. People have been told to only go out for essential things, to buy food or take away meals, or exercise in parks at a safe distance.
The Covid-19 has given an impact on Singapore’s economy, and it narrowed 2.2% in the first quarter of 2020, if it’s compared to the same quarter last year. According to the Trade and Industry Ministry, the country’s economy contracted sharply 10.6% due to the effects of the coronavirus in all sectors.
Singapore’s retail sales crashed by 40.5% in April from a year ago, while motor vehicle sales also remained the weakest area with a 68% year-on-year plunge. Among other big slumps were watches and jewellery (-81%), clothing (-75%), department stores (-75%), and recreational goods (-55%).
Additionally, weak consumer spending is predicted for the rest of the year, even when the economy is gradually reopening. Based on the Ministry of Manpower (MOM) data in April 2020, for the first quarter, overall unemployment increased from 2.3% to 2.4%. Retrenchments also rose to 3.000 from 2.670 from the previous quarter.
Despite the economic fallout, Singapore companies still have some opportunities to thrive and survive the crisis. The companies have some options to keep their businesses run and bear with the situation.
How Do They Thrive In The Midst of The Covid-19?
On 19 May 2020, the Ministry of Trade and Industry (MTI) announced that businesses will be allowed to resume activities in a phased manner, as Singapore moves to gradually easy Circuit Breaker measures. It means the companies have chances to operate and gain profits again.
Meanwhile, the Singaporean government offers S$4 billion Stabilisation and Support Package. They divide the package into 3 schemes:
- A job support scheme (S$1.3 billion) whereby the government pays 8% of the wages of local workers for 3 months, up to a S$3.600 monthly cap, and Singapore has 1.9 million local workers.
- A care and support package (S$1.6 billion) whereby the government provides one-off cash payments of between S$100 and S$300 to every Singaporean aged 21 or higher, thus helping households settle the cost of living.
- A wage credit scheme (S$1.1 billion) whereby the government co-funds approximately wage increases 30% for Singaporean employees, up to a S$5.000 gross monthly wage.
The government also gives a corporate income tax rebate up to 25% of the total tax payable in 2020. Also, in the aviation sector, which rebates on aircraft landing and parking charges, assistance to ground handling agents, and rental rebates for shops and cargo agents at Changi Airport. There will be a 15% Property tax rebate for Changi Airport too.
Another sector is also given help by the government. For instance, in the tourism sector, Singapore Tourism Board announced that license fees for hotels, travel agents and tour guides will be waived as part of measures to help the sector. Up to 50% of third-party professional cleaning fees will be covered, with a cap of $20.000 per hotel with confirmed cases, and a cap of $10.000 per hotel with suspected cases.
In addition, there is a way to improve internal response and mitigation measures. There are 5 key steps to mitigate the impact of Covid-19 outbreak on your business, so you can survive during the pandemic!
1. Refresh Business Continuity and Crisis Management Plan
You need to understand the situation and plan for the impact on local and international market operations, supply chains, cash flow and workforce. Use data and analytics to make the right decisions, then develop the plans needed to recover efficiently and effectively. It includes program assessment, implementation, testing, maintenance, and training.
2. Optimise People and Organisation Management
Businesses that have a presence in affected areas must review plans to keep their people and working environment safe. Prepare the working environment with up to date hygiene advice, visitor policies, and consider total building closure protocols, if social distancing is required. If your business is slowed due to coronavirus, it actually could be an opportunity to upskill your people and build long term relationships with them.
3. Ensure Agile, Aligned and Effective Communication and Stakeholder Management
Ensure you have plans to communicate with your people, manage customer expectations and work with suppliers to keep them up to date with the evolving situation and what could come next.
4. Review Your Digital Transformation Strategy
This crisis is actually testing your digital transformation strategy, and you can take this time as a chance to identify gaps that need to be plugged. Your digital readiness across technologies, processes, people will come to the fore and you may need to start re-working on some of the key building blocks of your digital strategy, including data and analytics, cybersecurity, digital trust and transformation.
5. Be Open to Collaborations with Government Agencies in Managing Crisis
Compliance with all government directives for the prosperity of the society is a must. Tough times like this are drivers of change and must work together to create value for the large society.
The companies clearly have some opportunities to thrive in the midst of the crisis. However, you cannot depend only on the government’s support, yet you need to hold down the outbreak impact on your business by preparing things. After all, you could manage your business and it will thrive and survive during the crisis.
In conclusion, this article gives you information about Singapore’s economic situation during the pandemic, yet the companies still have opportunity to thrive, and lastly there are 5 key steps to survive despite the crisis.