UNEMPLOYED SINGAPOREANS

Mdm Ho Geok Choo asked the Minister for Trade and Industry with the hope of foreign investments flowing to Singapore's manufacturing and services sector and creating between 12,000 and 15,000 new jobs (a) how and in what form will the economic restructuring be; (b) how will jobless Singaporeans be trained and assisted for gainful employment opportunities in these newly created jobs; (c) what will be the likely duration for the Singaporean unemployed to be ready for such gainful employment opportunities in these newly created jobs; (d) of the unemployed, how many constitute those released from prisons and drug rehabilitation centres; (e) how are these unemployed ex-criminals and drug offenders being assisted to gain employment without being prejudiced by employers.

The Minister of State for Trade and Industry (Mr Raymond Lim Siang Keat) (for the Minister for Trade and Industry): Mr Speaker, Sir, Mdm Ho Geok Choo has asked a somewhat comprehensive Question which covers three Ministries - mine, the Ministry of Home Affairs and the Ministry of Manpower. I have been given the privilege to give the initial response to her.

On economic restructuring, with rising competition and technological changes, we need to restructure our economy in two main ways. First, we need to shift towards a more flexible and competitive cost structure. This means reforming our wage structure to be more responsive to changes in business conditions, and re-tuning our CPF system to reduce statutory burden on employers. We must also lower direct taxes, and price our land and other infrastructure services competitively.

Second, we need to shift towards higher value-added, knowledge-based activities. This means moving up the manufacturing value chain, growing exportable services, and upgrading our domestic services sector. Of the 12,000 to 15,000 new jobs that EDB will bring in this year, more than 85% will require skilled workers. We must therefore upgrade the capabilities of our work force, and re-skill our workers.

Next, I will turn to assistance and training for unemployed Singaporeans. Under its Place and Train programme, the Manpower Ministry works with industry partners to first place job seekers with a prospective employer, before sending them for training. This is better than the train-then-place approach as it minimises wastage in training. MOM will work with EDB and employers to match job seekers with new jobs created, and provide the necessary training to equip them with the right skills and knowledge. Payroll-support for training will be provided through the Skills Redevelopment Fund (SRF).

Finally, on employment and rehabilitation of ex-criminals, we do not track the proportion of unemployed who are ex-prisoners or released from Drug Rehabilitation Centres (DRCs). Every year, there are about 11,000 offenders released from prisons and DRCs. In the first six months of this year, more than 900 ex-offenders have approached the Singapore Corporation of Rehabilitative Enterprises (SCORE) to seek assistance in securing jobs. Of these, 39% were successfully placed in gainful employment.

Offenders are prepared for gainful employment while they are still in prison and DRCs. SCORE provides them with vocational training in various skills such as food preparation, metal work and electronics. Employers also participate in training sponsorship and offering jobs. In 2001, the Prisons Department embarked on a public education campaign to counter prejudices in employing ex-offenders. Earlier this year, SCORE and a local company produced a movie `Twilight Kitchen' which traces the struggle of an ex-offender trying to gain acceptance at his work place. The movie will be screened to grassroots organisations to create greater awareness on the role that the community can play in reintegrating ex-offenders.

Mdm Ho Geok Choo (West Coast): Sir, in view of our economic restructuring, how do we intend to actually grow those sectors that will be our cash cows? As for those sectors that we would not be doing well in, what are our plans going forward? Would we be eliminating these sectors and, if so, how should we relocate employees in these sectors?

Mr Raymond Lim Siang Keat: There are three key thrusts in the strategy going ahead. One is that we intend to expand our external ties and that is why we have the free trade agreements and the informal people networks that we have launched. This is one of the key thrusts, which is basically to have a globalised economy.

The second thrust is to create an entrepreneurial economy and this is to create Singapore as a source of enterprise itself - a market for talents, ideas and capital. Finally, a diversified economy that, besides manufacturing, the other pillar of growth will be services and we will expand these services not just to strengthen our traditional areas of strength like logistics, finance or tourism but in new areas, such as healthcare, education and the creative industries.

This is the broad strategy. How it actually shapes up, I think we will have to let the market decide, including the movement of labour and people into the different industries.

Mr Sin Boon Ann (Tampines): Can I just ask the Minister whether he thinks that Singapore can effectively compete in the manufacturing sector in the coming years in the light of the competition that we face from India and, particularly, China, with their cheaper source of labour?

Mr Raymond Lim Siang Keat: I am quite confident that we will be able to compete. What is important is that we ensure that the economy as a whole is cost-competitive and what is important in terms of competition for the investment dollar is really the total package. It is not just a question of absolute cost but, at the end of the day, it is really output per unit of cost that is important. It is for this reason that Singapore has managed to continue to hold its own in the contest for the investment dollar. Last year, we brought in about $9 billion in fixed asset manufacturing investment. This year, as the Prime Minister has announced in his National Day message, we are looking at about $7.5 billion. We will continue to get major investments into Singapore. So I think it is the totality. Cost is an important factor but there are other attributes that bring investments into Singapore.