More donations needed as Singapore sinks deeper into recession

Singapore

MASSIVE job cuts are tipped to swell the ranks of the needy, requiring more charities to chip in to help build a multi-stakeholder front.

"Food on the table is going to be a basic concern for some households as the economic downturn bites hard and deep," said Eugene Tan, an associate law professor at Singapore Management University (SMU) and former Nominated Member of Parliament.

CIMB private bank economist Song Seng Wun predicted that the much anticipated recession is going to be harsh because of the cut-back in both supply and demand with movements severely restricted and economic activities reduced to bare essentials in the fight to tame the Covid-19 pandemic.

"There will be more job losses ahead," he said.

Trade and Industry Minister Chan Chun Seng told Bloomberg that the national GDP is "very likely" to drop more than 4 per cent in 2020, exceeding the official forecast for a contraction of 1 to 4 per cent.

Employment has already fallen by 19,900 in the first three months of the year, the sharpest drop since the 2003 severe acute respiratory syndrome outbreak. That was before tighter circuit breaker measures were imposed. With near-lockdown in the second quarter, economists including Mr Song and OCBC Bank's Selena Ling see job losses shooting up to anywhere from 80,000 to 100,000.

For the full year, economists have pencilled in an increase in the unemployment rate to as high as 4 to 5 per cent.

Low income workers, especially blue-collar, daily-rated and even gig workers and freelancers, are usually the biggest losers in a deep recession, Ms Ling noted.

The irony is not lost on Tan Ern Ser, an associate professor in sociology at the National University of Singapore (NUS) who pointed out that many of these workers are in essential services and held up as worthy of respect; yet their jobs are also "characterised by low pay, low job security and lack of social benefits".

"This means that they are living on the edge and could easily end up without a job and any pay, if they fall ill or are rendered unable to work due to an accident," he added.

"Covid-19 has opened our eyes to many groups that have been at the margins of society," said Melissa Kwee, chief executive of the National Volunteer and Philanthropy Centre (NVPC).

According to OCBC's Ms Ling, low income workers, who are usually not so tech-savvy, have been overwhelmed and have fallen behind in the digital economy. A compassionate and giving society can offer an "important buffer", she said. It can also employ digital tools to help by "connecting different players, doing needs analysis and matching demand and supply in an efficient manner".

Indeed, Ms Kwee of NVPC noted that Covid-19 has proven to be a driver of tech adoption. It has forced many to seek digital alternatives in all spheres of life, including donations. NVPC's online platform Giving.sg raised a record S$18.9 million in contributions in April, she said.

Still, Ms Ling said, the government has to be "the responder of first and last resort. "This is because the government can organise and galvanise the social services sector, draw upon myraid financial and non-financial resources, and have the database and power to intervene."

Along with CIMB's Mr Song, Prof Tan of NUS thinks the government's social policy has been very much geared towards helping the poor and vulnerable. "By and large, Singapore has put in place buffers to help soften the blow on the poor and stabilise their financial situation and keep them afloat, though some would still fall through the cracks," he said.

At the same time, SMU's Prof Tan is concerned that more will fall through the cracks in a deeper and prolonged recession.

"The government, through the Resilience, Unity and Solidarity budgets, has a variety of help schemes. But they are broad-based schemes," he said. Charities will have to fill the gaps, according to him.

Ms Kwee of NVPC added that the budget measures have helped to cushion the impact on the poor, but not all low- to middle-income earners would qualify for support. "There is still a need for a whole-community effort to ensure that vulnerable groups are not left behind in the digital economy."

SMU's Prof Tan called on the government to seriously consider dangling larger tax exemptions for charitable contributions. But donors may still not take the bait - especially when times are bad. In the US, donations fell 15 per cent in the 2008-9 recession against donations in 2006-7. The reason: The investment income of the rich took a big knock when the stock market crashed.

While the digital economy has produced many billionaires, NUS' Prof Tan said it has not necessarily "raised their propensity to donate money".

"That propensity has to come from elsewhere: empathy and compassion for the needy and vulnerable, or gratitude for the support they have received from people and the community and country when they were starting out in the past."

SMU's Prof Tan is pushing for "pre-emptive actions" now to ramp up social protection programmes "so that help does not arrive late". With "a severe recession to be expected", he said it is necessary to kickstart support and help schemes to stick it out in a long-drawn downturn.

"The post-Covid-19 Singapore will see the imperative grow for a multi-stakeholder approach to helping the disadvantaged," he said.

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