Singapore in straitened times
By Kalinga Seneviratne
SINGAPORE - This tiny island republic sits on trillions of dollars in foreign
reserves. Yet, Prime Minister Lee Hsien Loong said in a BBC interview this
month that his country cannot spend its way out of the economic downturn until
the global economy heals.
Singapore, which has no natural resources and a population of only 4 million,
has been badly bruised by the global economic turmoil and the latest figures by
the Development Bank of Singapore say 99,000 people will be laid off this year.
For the first time since its founding in 1965, Singapore has had to dip into
its foreign reserves to help fund a US$13.7 billion "Resilience Package" announced in the budget in January.
These measures will "help companies to remain viable but we must understand
that what we can do is to buffer the impact", Lee said in an interview on BBC's
Asian Business Report. "You must wait for the storm to pass."
During good times, Singapore benefited greatly, but when the economies of its
trading partners in the West collapsed, this Southeast Asian tiger was among
the first to be hit. The government believes that it will take at least two to
three years for the economy to recover.
The Asian Wall Street Journal, commenting on the emergency budget, said that
the global economic crisis was a wake-up call for Singapore, which has depended
heavily on export income, whose decline resulted in the growth rate declining
by 16.9% in the fourth quarter last year. "Singapore's economy would be more
resilient if it were better balanced," the Journal argued, pointing out that
consumption was only 40% of gross domestic product.
In response to the Journal's comments, Ministry of Finance spokesman Chin Sau
Ho argued that Singapore's economic model reflected the realities of a small
country striving to be a modern nation.
"It is diversified across manufacturing and services, but both are heavily
exposed to global markets," he said, arguing that "as a city-state with a
population of 4 million, businesses have far greater incentive to serve global
markets than domestic consumption".
But, the impact of the global financial turmoil on such a strategy has been
such that Lee raised the unthinkable here when he said in an interview with the
CNBC network, earlier this month, that Singapore might have to rethink its
export-led growth strategy.
"There will have to be a global rebalancing because we cannot expect the
Americans to be consumers of things made all over the world - and with the rest
of the world as savers, lending money to the US to buy things from you."
He acknowledged that this would mean a shift away from Asia's export-driven
economic development model.
A few months ago this would have been blasphemous for a Singaporean leader to
say, as the city-state's economic success with a per capita annual income of
over US$24,000 is attributed to its open economy, with about three-quarters of
its income coming from external trade and investments.
The government's investment arm, Temasek, has invested heavily overseas and
government-owned enterprises such as the telecom giant SingTel, Singapore
Airlines, DBS Bank Keppel Corporation and Semb-Corp derive a large chunk of
their incomes from overseas operations or trade. Their share prices and
overseas income have plummeted in the current global economic downturn.
"We are part of the world economy. We make chips, we make pharmaceuticals, we
make petrochemicals. We consume maybe 1% of what we make of these things.
Probably less," said Lee in the CNBC interview. "We are making for the world.
We buy from the world, for the world ... that's how we prosper."
To override this downturn, Singapore Airlines has grounded 17 planes and is
planning to lay off about 9,000 of its workers spread worldwide. The government
in its stimulus package has allocated large sums of money for retraining
laid-off workers for possible future jobs which could be in areas different to
what they have worked in before.
There seems to be a shift away from traditional manufacturing jobs to more
knowledge-based industries such as multimedia.
At the recent summit in Thailand of the Association of Southeast Asian Nations
(ASEAN), Singapore was at the forefront of calls to resist the temptation for
protectionism. That led calls for more open markets in the region and for
accelerating the setting up of the ASEAN economic community by 2015.
The 10 countries that make up ASEAN have a combined market of 560 million
people, but their purchasing powers vary widely, with some members like Laos,
Myanmar and Cambodia being among the least-developed countries in the world.
One silver lining is that the financial systems of these countries have been
relatively unscathed by the global financial crisis. Other ASEAN countries such
as Malaysia, Thailand, Indonesia, Brunei and the Philippines (the remaining
member is Vietnam) have been hit to varying degrees.
Former ASEAN secretary general Rodolfo Severino, writing in Singapore's Straits
Times newspaper, recently argued that many countries in the grouping benefited
by the bubble generated by the "heavily debt-dependent spending binge of
American companies and consumers, and clung to the profit-making and
job-creating model of export-led growth".
He argues that ASEAN should do more as a group to develop its economies and be
less dependent on such bubble economies and that it should stimulate domestic
demand with investments in the health, education and rural sectors.
(Inter Press Service)
within the next five years, a world's leading "bio-tech Intel" high tech micro-chip company will be 100% Singaporean owned and its HQ will be 100% based in Singapore.
Originally posted by Daddy!!:within the next five years, a world's leading "bio-tech Intel" high tech micro-chip company will be 100% Singaporean owned and its HQ will be 100% based in Singapore.
specialise in child birth bio genetic transplant and sex pills hor
by using nano-heat double imaging manufacturing technique.
ah chia,
we need your opinion also. anybody can cut and paste articles. we need to know your opinion since ur TS.
At the recent summit in Thailand of the Association of Southeast Asian Nations (ASEAN), Singapore was at the forefront of calls to resist the temptation for protectionism. That led calls for more open markets in the region and for accelerating the setting up of the ASEAN economic community by 2015.
The 10 countries that make up ASEAN have a combined market of 560 million people, but their purchasing powers vary widely, with some members like Laos, Myanmar and Cambodia being among the least-developed countries in the world.
I have three points or rather three questions
1) I think it is never the protectionist tendency of Singapore. Singapore is too small or insignificant to have an impact on ASEAN. Conversely, it is the protectionist tendency and barrier to entry of our neighbouring countries all along.
2) The problem also lies not in the variable purchasing powers of the region. The problems are in their infant or non existing markets all along. The faster countries like Laos and Cam, open to competition, the faster their infant markets will die. And this will bring other set of problems.
3) A regional market of 560 million ppl vs the world of 6 to 8 billions. Which is better for us? No matter what, we will always need global trade. Our current problem lies in our over-reliance on export to the US and Europe. Regional grouping bring us insignificant benefit. We should now explore other untapped regions, including Latin America, Middle East, India, Russia.
Originally posted by Ah Chia:Singapore in straitened times
By Kalinga Seneviratne
SINGAPORE - This tiny island republic sits on trillions of dollars in foreign reserves. Yet, Prime Minister Lee Hsien Loong said in a BBC interview this month that his country cannot spend its way out of the economic downturn until the global economy heals.
Singapore, which has no natural resources and a population of only 4 million, has been badly bruised by the global economic turmoil and the latest figures by the Development Bank of Singapore say 99,000 people will be laid off this year.
For the first time since its founding in 1965, Singapore has had to dip into its foreign reserves to help fund a US$13.7 billion "Resilience Package" announced in the budget in January.
These measures will "help companies to remain viable but we must understand that what we can do is to buffer the impact", Lee said in an interview on BBC's Asian Business Report. "You must wait for the storm to pass."
During good times, Singapore benefited greatly, but when the economies of its trading partners in the West collapsed, this Southeast Asian tiger was among the first to be hit. The government believes that it will take at least two to three years for the economy to recover.
The Asian Wall Street Journal, commenting on the emergency budget, said that the global economic crisis was a wake-up call for Singapore, which has depended heavily on export income, whose decline resulted in the growth rate declining by 16.9% in the fourth quarter last year. "Singapore's economy would be more resilient if it were better balanced," the Journal argued, pointing out that consumption was only 40% of gross domestic product.
In response to the Journal's comments, Ministry of Finance spokesman Chin Sau Ho argued that Singapore's economic model reflected the realities of a small country striving to be a modern nation.
"It is diversified across manufacturing and services, but both are heavily exposed to global markets," he said, arguing that "as a city-state with a population of 4 million, businesses have far greater incentive to serve global markets than domestic consumption".
But, the impact of the global financial turmoil on such a strategy has been such that Lee raised the unthinkable here when he said in an interview with the CNBC network, earlier this month, that Singapore might have to rethink its export-led growth strategy.
"There will have to be a global rebalancing because we cannot expect the Americans to be consumers of things made all over the world - and with the rest of the world as savers, lending money to the US to buy things from you."
He acknowledged that this would mean a shift away from Asia's export-driven economic development model.
A few months ago this would have been blasphemous for a Singaporean leader to say, as the city-state's economic success with a per capita annual income of over US$24,000 is attributed to its open economy, with about three-quarters of its income coming from external trade and investments.
The government's investment arm, Temasek, has invested heavily overseas and government-owned enterprises such as the telecom giant SingTel, Singapore Airlines, DBS Bank Keppel Corporation and Semb-Corp derive a large chunk of their incomes from overseas operations or trade. Their share prices and overseas income have plummeted in the current global economic downturn.
"We are part of the world economy. We make chips, we make pharmaceuticals, we make petrochemicals. We consume maybe 1% of what we make of these things. Probably less," said Lee in the CNBC interview. "We are making for the world. We buy from the world, for the world ... that's how we prosper."
To override this downturn, Singapore Airlines has grounded 17 planes and is planning to lay off about 9,000 of its workers spread worldwide. The government in its stimulus package has allocated large sums of money for retraining laid-off workers for possible future jobs which could be in areas different to what they have worked in before.
There seems to be a shift away from traditional manufacturing jobs to more knowledge-based industries such as multimedia.
At the recent summit in Thailand of the Association of Southeast Asian Nations (ASEAN), Singapore was at the forefront of calls to resist the temptation for protectionism. That led calls for more open markets in the region and for accelerating the setting up of the ASEAN economic community by 2015.
The 10 countries that make up ASEAN have a combined market of 560 million people, but their purchasing powers vary widely, with some members like Laos, Myanmar and Cambodia being among the least-developed countries in the world.
One silver lining is that the financial systems of these countries have been relatively unscathed by the global financial crisis. Other ASEAN countries such as Malaysia, Thailand, Indonesia, Brunei and the Philippines (the remaining member is Vietnam) have been hit to varying degrees.
Former ASEAN secretary general Rodolfo Severino, writing in Singapore's Straits Times newspaper, recently argued that many countries in the grouping benefited by the bubble generated by the "heavily debt-dependent spending binge of American companies and consumers, and clung to the profit-making and job-creating model of export-led growth".
He argues that ASEAN should do more as a group to develop its economies and be less dependent on such bubble economies and that it should stimulate domestic demand with investments in the health, education and rural sectors.
(Inter Press Service)
SG has been growing faster than G8 in the past 2 decades.
The huge net natinal reserve can help a lot.
So,SG is in a much better shape than others.
Originally posted by lionnoisy:SG has been growing faster than G8 in the past 2 decades.
The huge net natinal reserve can help a lot.
So,SG is in a much better shape than others.
We are much better than Somalia and Rwanda u mean? We are export driven economy hello. Dun u have anything negative to say about singapore at all??
Originally posted by lionnoisy:SG has been growing faster than G8 in the past 2 decades.
The huge net natinal reserve can help a lot.
So,SG is in a much better shape than others.
short and sweet and to the point!
hooray!
SG has been growing faster than G8 in the past 2 decades.
The huge net natinal reserve can help a lot.
So,SG is in a much better shape than others.
I am very pleased with your above post lionnoisy.
lee hsien loong of course can't be admitting he has no heart to serve the nation. To him and all in pap the nation is just tool for them to make money.
i dispise PAP when they take credit for singapore properity and blame the world market when it hit recession.
singapore being small can only be depending on export driven model. no matter how much money you dump into singapore economy, we will never become domestic consumption driven type of economy.
maybe we should ask Indonesia to sell batam, bintan to singapore and get back our christmas island from australia .