WITH commendable speed, the Government has brought in measures to keep as many business enterprises afloat and as many people employed as possible through the recession. The $2.3 billion business loan insurance scheme and $600 million skills upgrade programme announced yesterday constitute a pre-emptive strike against possible bankruptcies and mass layoffs as credit threatens to be constricted in financial markets and the economy enters choppy waters.

These plans, together with other measures already in place or to be announced on Budget Day, now brought forward by a month to January, are intended to not only help companies and workers ride the downturn but place the country in a stronger position when the economic storm has passed.

Will the pre-emptive strike hit its targets squarely? There will be hits and misses, as is to be expected. With tighter credit showing early signs of beginning to affect some business operations and expansion, loan insurance makes more sense in this climate than in the last recession.

The Government's enhanced financing schemes are aimed wisely at lending market confidence as well as extending actual funds. Making more sectors of the economy eligible for loan insurance coverage, upping the Government's share of risk with the banks from 50 per cent to 80 per cent, and insuring larger loans are measures that will help companies be viable, if not position them to exploit opportunities that will come with the recovery.

Similarly, the skills training programme will likely go beyond what its name Spur (Skills Programme for Upgrading and Resilience) implies, by improving longer-term employability while keeping shorter-term joblessness at bay. It builds on the national continuing education and training (CET) infrastructure in place since the last recession. The CET experience will be invaluable in guiding the Spur programme.

In particular, skills training and retraining should be appropriately designed and implemented. It should improve trainees' skills or re-skill workers for different but higher value-added work. As the ministers noted in announcing the measures, the post-recession economy might look quite different and will need different and more skilled workers.

In other words, the unemployed or employers sponsoring under-employed staff for training would short-change themselves if they go through the motions just for the allowance the state will pay.

The programme aims as much at preparing for the recovery as at getting through the present slowdown. It is not an unemployment payout scheme in disguise. Serious intent is required for the programme to have an impact that will outlast the worst of what the recession will bring.

This article was first published in The Straits Times on November 22, 2008.