Businesses in Singapore are embracing the 'new normal' amid promises of jobs and billions of financial aid from the city state's government
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- Singapore won global admiration for its handling of the pandemic, when a surge in cases and its first few deaths drove the government to impose partial lockdowns and travel bans.
- Despite efforts to curb the spread, businesses were hit hard, particularly those in the food and beverage, tourism, and construction sectors.
- The Singapore government aims to limit the economic impact of COVID-19 through job creation, tax breaks, and financial support.
- Companies are leveraging new norms in social distancing, while others are making steady progress into transforming their businesses to suit the new normal.
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COVID-19's spread through all corners of the globe left economies in shambles and uncertainty. Singapore's low caseload and low number of deaths from the pandemic have allowed it to reopen the economy in phases since June 1, while staving off a potential second or third wave.
Analysts have already come out with positive growth forecasts next year. According to the August Asean+3 Macroeconomic Research Office (Amro)'s Economic Outlook 2020 report, Singapore's gross domestic product will expand by 7% by 2021, after shrinking 6% this year.
The recovery will be supported by financial and manufacturing sectors, which have weathered the crisis better than other sectors, the report added.
ASEAN+3 Macroeconomic Research Office (AMRO)
Preventing unnecessary casualties with the 'circuit breaker' method
Singapore did not impose any harsh measures to combat the virus earlier this year, as community cases remained stable in January and February. But that changed in the months after and authorities confirmed a community spread and pulled out all stops to tame it.
The government did this in the form of a "circuit breaker," a lockdown imposed on April 7 that saw all non-essential workers working from home, the closure of all retail, service and entertainment outlets, widespread travel bans, and 14-day Stay-At-Home Notice (SHN) for travelers or in dedicated quarantine facilities.
Masks are required by law to be worn, and anyone caught without one would be fined $300 in Singaporean dollars, while eateries operated a take-out only model.
Singapore also set up a multiple-ministry taskforce to handle the economic and social impacts of the virus and put in place widespread travel bans.
A challenging time for Singapore's economy
Sectors such as tourism, food and beverage, and construction were greatly affected by the closures, social distancing regulations, and travel bans. Scores of staffs were laid off, while others endured pay cuts.
Singapore's gross domestic product shrunk by 12.6% in the second quarter, which ended in June, plunging the country into a technical recession. Singapore Airlines, the country's national airline, reported S$1.1 billion in losses in the quarter ended June.
Singapore Exchange-listed Koh Brothers announced that along with its subsidiary Koh Brothers Eco Engineering, it is expecting to book losses for its half-year financial results ended June. Despite the lifting of measures, it does not expect activity to return pre-COVID-19 levels.
Genting Singapore noted that its 2020 second-quarter fiscal year result was its worst quarterly performance, reporting a S$163.3 million net loss as global travel remains restrictive. Resorts World Sentosa, owned by Genting Singapore, announced it was laying off staff in July; the company did not confirm the number of employees affected, but it is estimated that about 2,000 workers were laid off.
Adapting to the 'new normal'
As the plight of ordinary Singaporeans hung in the balance, Singapore's government made an unprecedented move in its efforts to assist Singaporeans through the hard times ahead.
In March, Singapore announced that it would tap its reserves for US$30 billion in COVID-19-related assistance, the largest drawdown of reserves in its history. Its status as a wealthy financial hub gave it the reserves it needed to handle the economic fallout of the pandemic.
In June, the government announced that 100,000 jobs would be created by 2021. It's already encouraging mid-career shifts by providing heavy subsidies for re-training and upskilling. It emphasized jobs created by the pandemic and social distancing measures, such as temperature screeners, logistics handlers, digital marketers, and e-commerce specialists.
Gaming firm Razer has pledged US$50 million to support business partners in the form of financial contributions, cashflow support, and investments. The gaming industry has seen a spike in customers in the last few months, as more people stay indoors and find new ways to be entertained.
With residents ordered to stay home, businesses that depended mainly on physical shops had to get creative. They raced to upgrade or establish their e-commerce channels, but the process has not been easy due to the sudden surge in online orders.
Jumbo Group, a Singapore Exchange-listed restaurant chain specializing in chili crab, the country's national dish, noted in its end-of-March half-year results announcement that "it intensified its digital and online presence."
ASEAN+3 Macroeconomic Research Office (AMRO)
Areas of opportunity remain
Despite the bearish mood, certain sectors are thriving on new trends sparked from the impact of Covid-19.
Cloud-based platforms like Webex and Zoom allow companies to switch to remote working while supporting collaboration. With businesses going digital, tech-skilled jobs in data analytics, systems design, and cybersecurity have become 'pandemic-proof' even in sectors that are not traditionally tech-rich.
One such sector is medicine. Doctor Anywhere, a Singapore telemedicine startup that was established by an investment manager-turned-entrepreneur, has seen a three-to-four fold increase in business since the beginning of the pandemic.
Founder and CEO Wai Mun Lim noted that telehealth is useful in addressing workforce issues. This is especially so when healthcare workers were redirected to the frontlines to care for COVID-19 patients. It also ensures that vulnerable populations such as the elderly and the chronically ill are also taken care of, despite more focus given to COVID-19 infections.
With its proactive leadership, adaptive workforce, and cooperative population amid the stringent lockdown measures, Singapore is well-poised to recover from the pandemic fast. Industries are transforming and it remains to be seen how businesses in Singapore can adapt quickly and remain resilient as the country prepares for the new normal.
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