CARI Captures Issue 505: COVID-19-induced border closures from South Asia causing labor shortages in Singapore

SINGAPORE 
COVID-19-induced border closures from South Asia causing labor shortages in Singapore
(01 June 2021) The COVID-19 induced border closures with South Asian countries have caused labor shortages in Singapore, particularly in sectors which depend on low cost labor such as construction and shipping. Even before the authorities had prevented entries from India in late April 2021, and subsequently other South Asian countries in early May 2021, tighter travel rules were already keeping workers away. The labor shortage has caused construction projects to be delayed by as much as a year, pushed up labor wages by up to 30%, and have forced many laborers to undertake higher workloads. In 2020, the number of foreign workers working at building sites, shipyards, and factories plunged 16% year-on-year to 311,000, while the total number of international workers dropped by 14% year-on-year to reach 1.23 million. While the government has maintained its annual growth outlook for 2021 at 4% to 6%, versus last year’s 5.4% contraction, they noted the recovery could be uneven across different sectors and industries.
 

SINGAPORE 
Unemployment rate for Singaporean citizens and residents falls in April 2021
(03 June 2021) According to the Singaporean Ministry of Manpower, the unemployment rate for Singaporean residents and citizens continued to decline in April 2021. The unemployment rate for citizens fell by 0.1% to 4.1%, while the rate for Singapore residents fell from 4% to 3.9%. Overall, the unemployment rate remained unchanged at 2.9% in April 2021. A total of 92,100 people were unemployed in April, including 82,800 citizens. The unemployment rate peaked in September 2020, and has remained flat or declined from month to month since then. The Minister of Manpower noted that the unemployment rate remains elevated.
 

INDONESIA
Indonesian government to stick to promise of narrowing budget deficit to less than 3% of GDP by 2023
(31 May 2021) The Indonesian government intends to stick to its pledge of reducing its budget deficit to less than 3% of GDP by 2023, despite the fiscal uncertainty caused by the COVID-19 pandemic. The Indonesian Finance Minister stated that the government would be able to reduce its budget deficit to as low as 2.71% of GDP in 2023, from 5.7% in 2021 and 4.5% to 4.85% in 2022. The deficit ratio is expected to go down steadily, to as low as 2.6% by 2025. Indonesia’s efforts in fiscal consolidation has been complicated by a fresh spike in COVID-19 cases. The Finance Minister stated that the government can make spending more efficient and tap new funds like the sovereign wealth fund to bring in more equity financing instead of relying on debt financing. New taxes may also be introduced.
 

MALAYSIA 
Malaysia’s wealthiest saw their combined wealth jump by 14% in 2021
(04 June 2021) According to Forbes, Malaysia’s wealthiest saw their combined wealth jumped from US$79 billion in 2020 to US$90 billion in 2021, an increase of 14%. This was largely attributed to Malaysia’s dominant position as a major exporter of gloves to the world. During the pandemic, demand for protective gear increased significantly, causing Malaysian's exports of rubber gloves to doubled. Sugar baron Tan Sri Robert Kuok remains the richest Malaysian, with a fortune of US$12.2 billion. Tan Sri Quek Leng Chan, second-generation head of the privately-held Hong Leong Group, remains at No 2 with US$9.6 billion. Seven individuals from the 2020 list dropped out in 2021, including AirAsia duo, Tan Sri Dr Tony Fernandes and Datuk Kamarudin Meranun, due to the effects of the pandemic on the travel industry.
 

PHILIPPINES  
The Philippines central bank projects inflation to return to within its 2% to 4% target band by the second half of 2021
(04 June 2021) The Philippines central bank has projected inflation to return to within its 2% to 4% target band by the second half of 2021. This came after government data released on 04 June 2021 showed headline inflation had stabilized at 4.5% for the third consecutive month. The annual inflation figure for May 2021 reflected slower price increases in the heavily-weighted food and non-alcoholic beverage index, which offset higher energy costs. Core inflation, which excludes more volatile food and fuel prices, was also unchanged at 3.3% in May 2021. Inflation averaged at 4.4% in the first five months of 2021. The central bank projects the headline figure to remain above 4% in June 2021, and then to decelerate to within the target range by the second half of 2021 and beyond in 2022.

 

THAILAND
Thai government approves US$4.5 billion in stimulus measures to counter impact of new COVID-19 wave
(01 June 2021) The Thai government approved a package of economic stimulus measures totalling US$4.5 billion to counter the impact of Thailand’s most recent COVID-19 wave. The measures include cash handouts, co-payments, and cash rebates, and are expected to be implemented starting on 01 July 2021. Thailand’s economy is facing headwinds from its most recent COVID-19 wave, which has totaled more than 130,000 cases since it began in Bangkok in April 2021. The Governor of the Bank of Thailand stated on 31 May 2021 that the Thai economy may not return to its pre-pandemic growth levels until early 2023. Thailand’s most recent packages will be financed through borrowing under a US$32.0 billion program approved in April 2020.
 

CAMBODIA
Cambodia’s fresh chilli exports see 95% year-on-year jump in first five months of 2021 
(04 June 2021) According to Cambodia’s Ministry of Agriculture, Forestry and Fisheries, Cambodia’s fresh chilli exports jumped by 95% year-on-year in the first five months of 2021, reaching 56,507 tonnes in exports. Cambodia also exported 600 tonnes of dried chillies within the same period, a decline of 50% compared to the same period last year. The biggest export market for Cambodia is Thailand, followed by the United Arab Emirates. Among Cambodia’s other major agricultural exports include rice, rubber, cassava, cashew nut, corn, fresh banana, pomelo, mango, and pepper.

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