The first half of 2020 has been a life and death struggle for the global economy, as governments and central banks pulled out all the stops to prevent societies and economies collapsing under the weight of the Covid-19 pandemic. Unprecedented amounts of state resources have been commandeered through fiscal stimulus and “magic money” to stave off extreme downsides in the global economy. March saw the US Federal Reserve offer its largest ever stimulus package, comprising US$3 trillion ($4.15 trillion) in loans and asset purchases. 

Yet with the dust having settled somewhat as a result of these measures, Senior Minister Tharman Shamugaratnam argues that it is now time for policymakers to take a longerterm view. Governments, he argues, must now refocus their efforts towards preserving economic capabilities and social capital to prepare economies for renewed growth post-Covid-19. Tharman, who is also the Coordinating Minister for Social Policies, is particularly keen to get unemployed Singaporeans — many retrenched amid the Covid-19 outbreak — back into work quickly to avoid skills atrophy within the workforce. 

“Once you are out of work for a long period of time, skills tend to fade and employers also tend to look at you differently because they know you have been out for some time,” says the veteran minister at the first digital DBS Asian Insights Conference on July 23. He also notes that there is also a social and psychological dimension to long-term unemployment as well, which quickly falls into a vicious cycle as workers become less employable the longer they stay out of the workforce. Singapore has sought to prevent job loss with wage subsidies and traineeships for workers who nevertheless find themselves out of work. 

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