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Lessons and Innovations from Singapore’s Approach to Pandemic Aid

A shopping center in Singapore. (VOA News)
A shopping center in Singapore. (VOA News)

Dig through the billions of dollars of COVID-19 aid in Singapore, and one finds benefits for not just those living on the island, but also possibly for other nations in need of ideas to recover from the pandemic.

Hanim Zainuddin, for instance, usually spends her work hours donning a green sarong and crisscrossing the skies as a flight attendant. After flights were grounded, however, she noticed that more of her coworkers were switching over to health care work, helping in non-medical functions at the hospital. Zainuddin opted to join them, becoming one of 500 aviation workers who made the switch under a state program to adapt work under the pandemic.

The Singapore strategy goes beyond just surviving the COVID-19-induced recession, to also set itself up for a stronger economy on the other side. Besides spending unprecedented funds on relief, the government is spending to retrain workers and help companies adjust their businesses.

“As our labor movement puts it, we cannot protect every job, but we will protect every worker,” Deputy Prime Minister Heng Swee Keat said last week. “For those of you who have fallen on hard times, we will continue to support you and walk this journey with you.”

Heng was announcing S$8 billion in new aid, including for startups, training, and repurposing businesses. Singapore, dominated by a single party, has long blended capitalism with state intervention in the economy.

While some businesses have gone under because of COVID-19, Heng encouraged companies to change their focus if needed to survive, such as by switching to sectors he identified as having growth potential: health care, artificial intelligence, supply chain digitization, smart commerce, and sustainability.

Heng pointed to companies that changed their products, such as one that made factory equipment but now makes ventilators and X-ray components, as well as companies that changed their approach, such as a clothes store chain that doubled down on its online shop.

Singapore’s other strategy is to subsidize industries that are less able to adjust. With the borders mostly closed, the Southeast Asian nation is giving out S$320 million in tourism credits for locals to travel domestically.

The latest aid money will help those who are hardest hit, according to Soh Pui Ming, the head of tax at the consulting firm Ernst & Young Solutions LLP in Singapore.

“Reopening the economy while controlling the spread of the pandemic is a tricky balancing act,” Soh said. “Recognizing that some sectors and groups have recovered more swiftly than others, this round of support measures target those that are hardest-hit and in greatest need, while demonstrating financial prudence and not tapping into past reserves.”

The S$8 billion is in addition to the close to S$100 billion the government has already appropriated this year in response to COVID-19, which required dipping into official reserves, a rare action. The rich city-state, which depends greatly on international trade, went into an economic recession in the second quarter of the year, when gross domestic product decreased by 41% compared with the first quarter.