The circumstances are now more dire for Singapore if any recession were to come visiting. The substantial reliance on cheap foreign labours and foreign talents to promote growth will be one of the main causes Singaporeans will be made to suffer more than it should.
During a recession, demands for goods and services drop. As businesses cut operating cost, retrench workers or move overseas altogether, many jobs will be lost. Unemployment will rise. Singaporean workers who are deemed to be ‘expensive’ will no doubt be the first to go. Foreigners will have to leave the country due to inadequate jobs vacancies.
Whatever jobs left to be filled will most probably be given to foreigners due to their lower asking salary. That is provided quotas are still available.
In the event that quotas are a premium, businesses will then have to employ Singaporeans that normally commands a higher base salary. This will lead to an increase in operating cost. Businesses that are not able to sustain, will have to pack and fold and further add to unemployment numbers.
PRs and foreigners, who bought and rent houses during golden times, will have to sell, vacate and leave the country as they are unable to service mounting bills while being jobless.
Houses will be sold dirt cheap due to the urgency of those leaving. Prices of HDB flats will be affected. Supply outstrips demand many fold. Housing agents will meet with increasing difficulties to secure any deals. Thus they will also succumb and contribute to the unemployment digits.
Some banks will fold too. Banks loan your money out and then collect a profit from it. During recession, people couldn’t pay their loans back, which caused the bank’s money supply to drop. Then when someone wanted to take their money out of the bank, it wasn’t there. The news would spread and cause a panic. Panics are when everyone runs to their banks to take out their money. These runs on the bank cause it to go bankrupt and fail.
Renovation companies will go bust. Insolvency cases will go northward. Bankruptcies will be the order of the day.
Houses will be empty. Property will crash, and burn those who over-leveraged on their mortgages. In Singapore, you cannot help but to over-leverage on your house loans. It’s not entirely the fault of a person. While pay has stagnated over the past 10 years, prices of flats had quadrupled. In order to have a decent roof over our heads, we have no other choice but to over-leverage on their house loan. I’m sorry, but living in a cramp L-Shape flats are not an option for big sized families.
Rent will fall in tandem with dirt cheap flats. Those who survive on rental income will need to find alternatives. Commercial buildings will have many unoccupied office spaces. Even now it has been seen that many of the private properties were only partially occupied.
The gov is ramping up the infrastructure to materialize the 6.9 million population white paper. By then, the percentage for native and foreigners will be almost 50/50. Our liberal immigration policy is hurting us but this govt is bent on implementing it.
In the event of a recession, almost as high as 2 million foreigners will leave Singapore leaving behind inconceivable damage to our country and economy.
The 60.1% will then realise their follies. A new govt will be voted in. While Singaporeans bite the bullet and start rebuilding, our million dollar ministers are nowhere to be found. Probably, they will be perched at some exotic countries, sans remorse, sipping their hot Milos contentedly.
God bless Singapore.
Regards,
Osman Sulaiman
*The writer is a member of RP.