When “Solidarity” Is Exclusive: Singapore’s Economic Response to COVID-19

On April 6, the third stimulus package was announced to alleviate the economic damages of the COVID-19 outbreak. The “Solidarity Package” includes the following: First, fiscal injection that amounts to 12% of Singapore’s GDP (Yuen, 2020). Second, enhanced job support, subsidizing up to 75% of the first 4,600 Singaporean dollars of all local workers’ monthly wages for the month of April (Yuen, 2020). And third, direct support to all adult Singaporeans, who will receive a S$600 cash payout regardless of income (Yuen, 2020). Singapore is dipping into its reserves for the first time since the 2009 economic crisis. 

The “Solidarity Package” is the third economic package released as a result of the pandemic. The first, the “Unity Budget”, was announced on February 18th. Singapore was one of the first countries to be hit by COVID-19. As a result of Singapore’s heavy-handed governance structure, experience with SARS, and proximity to China, economic action was taken far quicker than many other countries. The S$6.4 billion “Unity Budget” was not a drastic change; it included corporate tax cuts and rebates, and an 8% wage offset through the Job Support Scheme (Ministry of Finance, 2020). 

The “Resilience Package” was announced on March 26th, and included a massive S$48.4 billion stimulus package (Ministry of Finance, 2020). Politicians announced three-month pay-cuts as a show of solidarity. Cash payouts were given to families and at-risk workers.

In addition, the Ministry of Law introduced the COVID-19 Bill in Parliament next week, which seeks to offer temporary relief to businesses and individuals who are unable to fulfill their contractual obligations because of COVID-19 (Ministry of Law, 2020). The goal is to provide temporary cash-flow relief for businesses and individuals who otherwise risk having their deposits or assets forfeited. This includes state-approved rent freezes for a 6-month emergency period during the pandemic (Ministry of Law, 2020).

The government is owed credit for efficient action and caring for the well-being of its citizens during the pandemic. But if there is one gaping hole in Singapore’s economic welfare response, it’s that it completely leaves out non-citizen and migrant workers. 

The Singapore government is subsidizing 75% of the income of all workers in Singapore for April and between 25% to 75% for the rest of the year depending on the industry; however, migrant workers are not part of this, and are vulnerable to being laid off during this time(Ministry of Law, 2020). As their wages are structured with a basic component (sometimes just $600, due to lack of minimum wage) and a "work" component (an additional $450), the government has suggested that employers cut the extraneous component and reduce workers' wages since they are unable to work during this time period (Ministry of Finance, 2020). This has led to workers to claim that they are unable to pay for phone bills to contact their family. 

Migrant workers on workers passes or S-passes (which designate them as “unskilled labor”) largely work in the construction or marine sector. In non-pandemic times, the fact that their work-passes are entirely reliant on their employers means they are vulnerable to exploitation and abuse, often dealing with unpaid salary claims and injuries. Migrant workers are often housed in crowded dormitories, and transported to work sitting at the back of trucks shoulder-to-shoulder.

Migrant worker dormitories thus emerged as the hot-spots for Singapore’s growing COVID-19 cases. Dormitories were thus gazetted as “isolation areas” (meaning they are unable to exit), leaving both those who are infected and those who are not stuck in close-quarters, increasing the risk of internal spread. Of Singapore’s 3,252 cases (as of April 14th), 1,625 are related to migrant worker dormitories (Geddie, 2020). While the government is “taking care of daily needs”, photos have spread on social media showing migrants being fed rotten vegetables and small portions. When the border between Malaysia and Singapore closed, many who commute daily were given the choice of losing their income and going home, or staying in Singapore and effectively being rendered homeless. Recently, the government has attempted to combat spread by moving some workers into make-shift dorms in carparks and factories.  

It is unfortunately no surprise that the Singaporean government has taken little action to protect migrants during the pandemic. On April 6th, the Ministry of Manpower gave a license to employers of foreign workers to cut their wages by 25% (Webmaster, 2020). Furthermore, the economic relief by the government is directed to the employers, rather than the workers. The government will waive levies due in April and give a one-time levy rebate of $750 to employers (Ministry of Manpower, 2020). Rather than mandating this money be used to support workers, the Resilience Package only offers a vaguely worded advisory that employers are “strongly urged” to do their part to hold onto their workers.  

Singapore has worked swiftly to take care of its own citizens during the pandemic. Despite timely and generous economic action for citizens, the IMF projection for Singapore’s GDP growth is -3.5%, while Singapore’s own forecast ranges between -4 to -1% (The Straits Times, 2020). Those who will be affected most will be those who are not protected or cared for under the stimulus packages. Migrant workers are the basis of the Singaporean economy; quite literally, the country is built on the back of these workers. In a time where mutual solidarity and global cooperation is more necessary than ever, excluding migrants from economic relief movements will only worsen the effects of the pandemic. 

Sources

Geddie, John (April 15, 2020). “In Singapore, Migrant Coronavirus Cases Highlight Containment Weak Link.” Reuters. Thomson Reuters

Ministry of Finance (April 16, 2020). “Supplementary Budget Statement.” Ministry Of Finance | Singapore Budget 2020 | Supplementary Budget Statement. 

Ministry of Law (April 2, 2020). “Temporary Relief for Inability to Perform Contractual Obligations Due to Coronavirus Disease 2019 (COVID-19) Situation.”

Ministry of Manpower. (April 6, 2020). “Advisory on Salary and Leave Arrangements during Circuit Breaker.” https://www.mom.gov.sg/covid-19/advisory-on-salary-and-leave.

Sin, Yuen (April 6, 2020). “All Adult Singaporeans to Receive One-off $600 Solidarity Payment in April to Cope with Covid-19.” The Straits Times. The Straits Times.

The Straits Times  (April 14, 2020) “Some Asian Economies to Avoid Recession, Says IMF.” https://www.straitstimes.com/business/economy/some-asian-economies-to-avoid-recession-says-imf. 

Webmaster. (April 13, 2020) “Covid-19: Media Statement, 13 April 2020.” TWC2. TWC2. http://twc2.org.sg/2020/04/13/covid-19-media-statement-13-april-2020/.