Keep stagflation at bay: Lim Swee Say
June 23rd, 2008 by ALVIN SOONG
This is an important article on stagflation and we are listing it in full details.
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IF INFLATION is bad, consider a ‘worst-case scenario’ of Singapore sliding into stagflation, said labour chief Lim Swee Say on Monday.
It is inflation coupled with slow or negative economic growth - a situation Mr Lim said the Government must guard against by ensuring that the economy keeps growing.
Otherwise, jobs will be lost and wages will stagnate.
One way to avoid stagflation is to maintain a foreign worker policy that is ‘very responsive’ to business needs, he told some 200 residents of Sengkang West at a dialogue that wrapped up his visit to the constituency.
Mr Lim, secretary-general of the National Trades Union Congress (NTUC), illustrated his point by comparing Singapore to Denmark. Both countries have near full employment, but Singapore’s economy grew by 7.5 per cent last year, while Denmark’s was only 1.3 per cent.
Denmark’s slower growth rate was because it was running out of workers but still placed a cap on foreign workers because of integration issues, Mr Lim was told on a research trip there last week.
Singapore takes a different approach.
‘If we’re short of construction workers, we allow (foreigners) to come as construction workers. It helps us to keep growing our economy,’ he said, urging Singaporeans not to view foreign workers ‘as a threat’.
Extracted from Sunday Straits Times 22nd June 2008. Read the full story in today’s edition of The Straits Times.
