the brighteSt
Star of all
today athlete
of the year 2008
is li Jiawei.
SportS 24
happy
neW year
today will be
taking a break
and we will be
back on friday.
but do log on
and read prime
Minister lee
hsien loong’s
new year
message online.
coluMn
Maria Siow
Workers in China are becom-
ing more assertive about their
labour rights. While handling
their grievances is a delicate
task for the authorities, there
are no strong indications that
the current wave of unrest will
threaten the Communist Party’s
hold on power, says our East
Asia Bureau Chief. Page 12
WorlD
bombing to go on
Despite growing calls by the
international community for
an end to the aerial bombard-
ment of the Gaza Strip, Israel’s
Infrastructure Minister says
that his country is not inter-
ested in restoring a truce with
Hamas and allowing it to “pre-
pare an even stronger attack
against Israel”. Page 2
a speech, at last
An opposition boycott and a
switchinvenuecouldn’tstophim.
Thai PM Abhisit Vejjajiva finally
manages to deliver his hour-
long inaugural policy address
at the Foreign Ministry build-
ing just 3km from Parliament
House, in which he promises to
jumpstart the battered Thai
economy, heal its politi-
cal divisions and repair its
tattered image. Page 2
a publication of
Mica (p) 233/10/2008
hotline 6822 2268
ADVeRtiSe 6333 9888
Are these workers just the tip of the iceberg?
leong Wee Keat
weekeat@mediacorp.com.sg
IN WHAT is becoming a familiar sight, a
group of about 200 China national work-
ers turned up at the Ministry of Manpower
(MOM) yesterday morning to complain
about unauthorised salary deductions
and wages owed to them. A group of 28
Bangladeshi workers have also filed similar
complaints, claiming they had not been
200 china nationals
gathered outside
MoM yesterday.
leong Wee Keat
coSt of borroWing
Easing the pinch
govt cuts rates, now what will get
banks to extend credit to SMes?
tan hui leng anD Kelvin choW
huileng@mediacorp.com.sg
A MONTH after the Government unveiled plans to
help loosen banks’ credit purse-strings for busi-
nesses, it is taking further steps — this time, to
whittle down the cost of credit for Small and Me-
dium Enterprises (SMEs), who have been com-
plaining that loans are still hard to come by.
“We are responding to feedback ... that compa-
nies are now trying to manage their costs. Interest
cost is clearly one of these elements,” said Senior
Minister of State for Trade and Industry, Mr S Iswaran,
who had met with some 20 representatives from
the Enterprise Development Centres and Singapore
Business Federation.
The result will be, come tomorrow, a trimming of
loan interest rates by 1.25 percentage points for both
new and existing loans under three of the Govern-
ment’s business financing schemes — including the
new Bridging Loan announced just last month.
The Government will also boost its current
50-per-cent share of the Loan Insurance Scheme
premium — set at 0.15 per cent of the loan quantum
— leaving enterprises with just 10 per cent to pay.
While some 13,540 existing loans amounting to
$554 million should benefit from the interest rate
cuts — including 30 companies whose loans have
been approved since the enhanced loan schemes
kicked in on Dec 1 — do the cuts go far enough?
SMEs Today spoke to were generally welcoming.
Wednesday December 31, 2008 www.todayonline.com we set you thinking
paid for the past four months.
Far from being isolated headline mak-
Mr Zhai Yongli, one of the 200 work-
ers at the MOM yesterday, was fearful he
ers, recent reports of workers being left in would have no money to send home for
the lurch seem to be the tip of an iceberg.
And the economic crunch, which has
next month’s Chinese New Year. Like his
fellow workers, the 36-year-old alleged
led to a swelling excess of manpower in that his employer made unauthorised de-
many sectors, is bringing to the surface like ductions from his salary each month, sup-
never before underhanded practices — such posedly for a “deposit” — a sum that has
as unsanctioned deductions, illegal deploy- amounted to $8,000 so far.
ment of workers and strong-arm tactics by Other workers from Zhonghe Huaxing
>> continueD on page 4
employers during conciliation attempts.
only those
with passion
need apply
tWeaKS froM toMorroW ong Dai lin
loan intereSt rateS
dailin@mediacorp.com.sg
Down 1.25 percentage points for loans EVERY time a downturn
under Micro-Loan, Bridging Loan and Local
Enterprise Finance schemes (including for var-
strikes, teaching becomes a
popular career option, and it
iable interest rates). New rates for tenures of
is no surprise some parents
4 years or less >> 5%. More than 4 years >> 5.5%
have expressed worries re-
loan inSurance preMiuMS cently about the quality of
Government to raise its share from 50% to 90%
incoming teachers ahead.
Yesterday, as the Minis-
try of Education (MOE) said
“We are at the point of our business where we are that it will ramp up new hires,
looking to expand, and borrowing at a lower interest Education Minister Ng Eng Hen
rate means more cost savings,” said director of Hock had this message for potential
Lian Huat Foodstuff Industry, Mr William Tan. applicants: Only people with
Packing company Greenpac’s managing direc- the passion and aptitude for
tor Susan Chong said it would be better if the quali- teaching are wanted. “They
fying criteria were lowered as well. “Some start-ups must have these aspects. They
might have some difficulty securing financing from can’t just want to be a teacher
banks and if they do not qualify for the Government because there’s a downturn,”
loans, they will be stuck in the middle.” he said yesterday at an appoint-
On gripes that banks, which administer the ment ceremony for principals,
schemes, are still reluctant to loosen the purse-strings, where he detailed his minis-
Mr Iswaran said he could understand lenders’ risk aver- try’s plans under the current
sion “at this stage” given the environment. “They need economic climate.
to take that into account in their credit assessments In all, some 7,500 teaching
and work out what level of risk they can take.” and teaching-support jobs will
On their part, businesses need to know how be available next year. MOE had
to “articulate their business case to the banks”, he earlier planned to quadruple
added. “It’s not business as usual, so (you) have to the numbers of allied educators
be able to demonstrate where the cash flow is com- to 2,800 by 2015 but will now
ing from, how is the business being modified.” recruit ahead of schedule.
>> continueD on page 4 >> continueD on page 2
 news  WedneSday december 31, 2008 today

coSt of borroWing

Easing the pinch

>> continued from Page 1
Could the Government not simply lend
directly to companies?
In response to this suggestion, raised
earlier in a column by Today editor-at-large
Conrad Raj, Mr Iswaran, said it preferred to
work with the banks and let them do the
risk assessments.
“Because we are sharing risks with
the banks, we avoid any moral hazards as
the banks would also want to be satisfied
themselves that these are viable companies
with viable business propositions. Then the
Government comes in to mitigate the risks
on the downside and make them a little
more willing to make loans,” he said.
Forecast economist Vishnu Varathan
suggested that the authorities could also
take a leaf from the United States Federal
Reserve and securitise loans given out by
financial institutions.
“If banks are tight on liquidity, they
could securitise bridging loans and pledge
these to the Government as collateral for
fresh funds. It acts like a credit expansion
scheme,” he said.
Another way to free up more credit for
SMEs could be to set up a fund comprising
the Government’s coffers and financial
institutions, with co-shared risks.
“Companies intending to borrow
funds will have to fulfil certain criterias,
to prevent any unnecessary default risks
associated with companies that have weak
fundamentals.
“This fund will only be used to make
loans to SMEs that qualify,” said Mr Var-
athan.
As to overall business costs, Mr Law-
rence Leow, president of the Association of
Small and Medium Enterprises, said firms
would prefer a cut in direct costs, rather
than trimming CPF contributions — a pos-
sibility bandied about with wage guidelines
to be tweaked next month.
Companies have raised this with the
authorities and while there have been no
clear signals so far, Mr Leow thinks rental
cuts and tax rebates could be unveiled in
the Budget to be announced on Jan 22.
He also suggested allowing companies
to pay their taxes by instalments.
Asked if CPF cuts would be one of the
measures the Government is looking at,
Mr Iswaran said: “I don’t want to pre-empt
the Finance Minister but I think, in general,
the point has been made that the Gov-
ernment will continue to look at what is
necessary to work with businesses in these
challenging environment.”
>> tranSPort LoanS diVe b1

Are these workers just

the tip of the iceberg?
>> continued from Page 1
Development and China Nucle-
ar Industry Huaxing Construc-
tion claimed they were not
paid for three months and that
they had been subcontracted to
other employers without their
knowledge. When approached
by Today, their employer, Mr Ye
Fuliang, declined to comment.
The China Nationals case
echoes another high-profile
case two weeks ago, when
179 Bangladeshi workers were
abandoned with months of
wages unpaid; their registered
employer is being probed for
illegally deploying them.
T oday understands that
it is not uncommon practice
for contractors or employers
to bring in more workers than
they need, then deploy them
out illicitly to another sector for
a kickback. But with the down-
turn and work drying up, these
excess workers are left sitting
on their hands.
Happily, for the 200 Chi-
nese workers, a MOM spokes-
person said late last night that
the dispute had been “amica-
bly” resolved — the employers
yesterday banked in Septem-
ber’s wages into the workers’
accounts and have pledged to
make good on all arrears by the
Chinese New Year, with the first
instalment next week. “The par-
ties have also reached an under-
standing on other differences,”
said the spokesperson.
Strong-arm tacticS
Meanwhile, the Bangladeshis
who had approached MOM
yesterday claimed they feared
repatriation by their employer
if they returned to their dormi-
tory. The group of 28 have been
sleeping along Desker Road for
the past three nights.
Some employers have can-
celled work permits even as pay
disputes are being settled with
MOM — presumably to pressure
workers to cave in.
In October and Novem-
ber, 42 PRC workers from Xuyi
Building Engineering Company
approached MOM to recover
their salary arrears and resolve
penalty payments. According to
MOM, the company unilaterally
cancelled the work permits of
six claimants, without apply-
ing for Special Passes to allow
them to remain here pending
the settlement of their claims.
The six would have thus flouted
immigration laws, and could be
jailed and fined.
“MOM takes a serious view
of such conduct by the employer,
which jeopardises the concilia-
tion process,” said a spokesman.
The employer was warned for
failing to pay its workers on time,
and “its irresponsible conduct” of
cancelling the permits.
What such examples show,
is that foreign worker’s situation
is “quite precarious”, in Madam
Halimah Yacob’s words. “They
can only work for one employer.
So when they don’t get paid, and
they owe creditors back home,
they keep quiet, hoping that
things will get better. They can’t
walk out of the job like the Singa-
porean can, find another job and
file a complaint with MOM,” said
the MP who sits on the Govern-
ment Parliamentary Committee
(GPC) for Manpower.
She called on MOM to step
up enforcement against rogue
employers and to review the
foreign workers’ quota — fixed
during times of good economic
growth — to prevent similar sit-
uations from cropping up next
year and in 2010.
MP Denise Phua said more
agencies should be engaged in
solving foreign-worker woes.
“The final, total solution needs to
be stitched not just by MOM, but
with the relevant foreign embas-
sies and other stakeholders like
employers’ federations and NTUC
… from ensuring basics like food
and lodging, to job placements
where possible,” she said.