NST Report: Bleak outlook for Singapore
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Bleak outlook for Singapore
Hardev Kaur (Mar 6 2003)
Singapore, which once boasted the regionÂ’s best economic performance, faces unprecedented challenges including a lack of entrepreneurship among its people and rising unemployment, which has eroded consumer confidence.
WHILE its neighbours, Malaysia, Indonesia and Thailand, were subjected to currency manipulations and speculations, Singapore's economy escaped the financial crisis in 1997-1998, registering Gross Domestic Growth (GDP) of 1.3 per cent in 1998. In fact the republic's economy was once one of the region's best performers, enjoying 10.3 per cent growth in 2000. In 2001 it fell into its worst recession since the 1960s, hit by a slump in exports due to the world economic slowdown and the collapse of the hi-tech sector.
It registered a growth of 2.2 per cent last year and its outlook remains uncertain. Malaysia, on the other hand, recovered from the financial crisis to record a growth of 4.2 per cent.
The impact of the sluggish world economy and the increased competition from the region and emerging China are beginning to have an impact on Singapore's economy. It faces risks of slower growth, rising structural unemployment and new uncertainties. According to the republic's Deputy Prime Minister Lee Hsien Loong, "Singapore is at a turning point". Lee, who is also Finance Minister, said Singapore faces "not just greater economic volatility but also new political and security uncertainties".
Singapore is not completely over the 2001 recession and Lee says "competition is keener and changes are coming faster..." Reports point out that the "iron bowl" of job security is cracking in Singapore as government bodies and state-linked companies alike trim their workforce in a massive restructuring exercise. Singapore's unemployment has risen from 3.3 per cent in 2001 to 4.4 per cent last year and could rise above 5.5 per cent. The outlook is uncertain and downside risks remain, according to Tan Leng Leng, director for Research and Statistics in Singapore's Ministry of Manpower.
Layoffs have been on an unprecedented scale. "It certainly is a sign of the times for Singapore Inc," said David Cohen, economist from MMS International. Workers struggling with the current economic slowdown were disappointed that the Budget tabled in Parliament last week did not bring much monetary relief. Preliminary estimates indicate that 18,900 workers were retrenched in Singapore last year and this is in addition to the 25,800 retrenched in 2001. In the first two months of 2003, PSA Corp announced that it is cutting its force by 800 or 13.3 per cent for the first time in more than 20 years. The supremacy of PSA, which operates one of the busiest ports in the world, has been challenged with the emergence of rival ports in the region. In fact it lost two of its prominent clients — Danish firm Maersk Sealand and Taiwan's Evergreen Marine Corp over the last two years to Tanjung Pelepas in Malaysia.
This prompted PSA to overhaul its strategy, which includes offering clients rebates, but that strategy has proved to be insufficient.
Neptune Orient Lines is also cutting 1,100 jobs worldwide of its 12,000 workforce worldwide. Chartered Semiconductor will cut 500 jobs this month when its wafer fabrication facility closes. The job losses are not limited to the private sector. The Housing and Development Board, the Government's housing arm, is reducing its labour force, shedding between 2,500 and 3,000 of its 8,000 workers. The retrenchments will add to the pain Singaporeans are already enduring due to a severe downturn in 2001 when the economy produced a two per cent contraction. Singapore is losing its edge due to its rising costs. According to Prime Minister Goh Chok Tong, Singapore needs "surgery" to create new growth in the city state's trade-driven economy. The deficit budget aimed at stimulating growth and cutting business costs lacked in major policy initiatives. The Finance Minister tabled the third straight budget deficit for the republic which has boasted of budget surpluses since the 1970s.
Analysts did not expect it to have much impact on the overall economy. "It's been a major disappointment ...much ado about nothing," Joseph Tan, economist at Standard Chartered Bank is reported as saying. The business expectations survey shows that manufacturers expect business conditions to remain lacklustre in the first half of this year. Sentiments have also worsened among firms in the commerce, real estate, transport and storage sectors. Singapore's economy has undergone a radical change in recent years, most notably in the financial sector where the Government has introduced a series of changes aimed at pushing the local players to become more competitive. Some of the world's well-known lenders such as Standard Chartered Bank and HSBC were granted licences to offer a full range of financial services and the securities industry was liberalised. But even so the financial services sector reversed sharply from a 3.7 per cent growth in 2001 to a contraction of 4.8 per cent in 2002.
The stockbroking activity was adversely affected by poor sentiments in view of the global uncertainties. The outlook for Singapore is mixed. With an uncertain world economic scenario, a possible US-led war against Iraq, rising oil prices and contracting world trade, Singapore is facing a bleak future.
Salomon Smith Barney points out that in terms of contagion, Singapore "should suffer greatly" due to its open economy, oil imbalance and tourism dependence, than Thailand or the Philippines.
Undoubtedly, Singapore will not be the only economy to be affected by the war. But the impact on the republic would be much higher than others in the region as the "Singapore economy may not be in the best of shape", according to Dow Jones. At the same time the world economic scenario is not encouraging.
The uncertain international environment will affect trade and services, including tourism. The "biggest challenge" for Singapore is deemed to be from China. Its entry into the World Trade Organisation has meant that Singapore is facing tough competition from regional rivals. The domestic scenario is also challenging. There is a lack of entrepreneurship among its people and consumer confidence in the republic has been dampened by the rise in unemployment and a decline in the stock market.
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Source: News Straits Time 6 Mar -
Singapore does not have too much internal dosmestic consumption. That's why weak. This can internal dosmestic consumption policy can only be a short term policy for Singapore because Singapore's economy is dependent on Free Trade!
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2 words.
Not suprizedddddd -
4 months ago I predicted this and posted a whole thread on how Singapore spends too little on its economy and too much on its military. I got blasted from all the military nuts in this forum.
I only have one thing to say to them.
You buggers have shot the messanger and brought this doom upon the rest of us. I hope that you are now satisfied and will regret your actions for the rest of your life.
The most childish amongst them even said this "Our economy is strong .. we do not need to do anything to boost it but we need to keep our military strong as the #*^@* up north are untrustworthy and will attack us"
Well, to the misguided juvenile, I hope that you are happy now. -
lets be objective... decreasing the military budget won't help the economy. it might worsen it though... imagine the SAF laying off regulars
now its not a matter of money not enough, but growth not enough. thats always a more slippery issue.
already, people are complaining that the GLCs are asphyxiating private economic initiatives. putting more taxpayers money there won't help. money is already allocated for re-training workers and encouraging entrepreneurship so i think we're on the right track.
if the gov't blinks now and slashes military spendings just to post a budget surplus, now, THATs stupid. we'll just lose our military edge and still be in an economic slump. -
Sure, Singapore's outlook is bleak, so are a lot of countries, malaysia is no exception, just that they are hushing it up. What ever problems we are facing, they are facing it as well.
For eg, manufacturing sector is moving out of singapore to countries with cheaper labour, China, Thailand, etc. For me, I have seen these coming back in the late 90s. Come on, you don't need a PhD to tell you that sustainability will be a problem when the price TV and VCRs OR computer harddisks we manufacture have been tumbling down since the mid-late nineties. Ask yourself, what is the price of a 40Gb harddisk right now in SimLim Sq., compared to a 5GB one about 6 years ago? The relative price has dropped so significantly that our relatively high labour cost (among others), cannot sustain, at least for those low end items.
As for Malaysia, they can gloat all they want, but in a couple of years time if not sonner they will face the same predicament as us.
How I know this, because my equipment suppliers (I'm in manufacturing) have been telling me their customers in Malaysia, as well as Thailand, are also moving their production to cheaper countries, China and Vietnam,etc. Companies in Malaysia are laying off their staff as their lines are closed or shifted elsewhere.
Does malaysia thinks it will be safe from competition coming from China, or even India? If it does, then they are more naive than I presume. Their national car maker, Proton, will not stand a chance when their automotive industry is opened up in 2005. And I am not even talking about China, but the competitiveness of Thailand. They are already getting good impressions for their quality of the made-in-Thailand cars.
Honestly speaking, Asean should work together en-bloc in order to compete seriously against China, and malaysia should realise that sooner, rather than gloat over its "victories" over Singapore, and then find themselves a big loser in the near future. -
CX, I'm on your side regarding those points.
Singapore's economy is at its lowest pint since the forming of the republic. The lack of worldwide demand and the globalised economics model adopted by singapore means that we are very much affected by worldwide demand and supply fluctuations.
China is a big and developing market with their own high tech sector and low cost labour, it is no mean feat to compete head on with it.
Lamenting about the inevitable is pointless.
What our government needs now is to restore investors' confidence and thrust in our economy. With the EDB trying to market singapore worldwide while the spectre of war hangs above is proving to be one of the hardest thing to do. Even so, I hope the government would not sit aloof in their towers thinking things aren't as bad as they imagined.
"Retrenchment is not a bad thing after all" mentioned by our very own PM may have an underlying meaning to it. I jolly well hope it meant the realisation of the difficult times and plight of the nation by the ruling party and puts its best foot forward to set things right.... Hopefully by next year or so, we are able to see some change in the governing policy.
Rant""
Talking about investors' confidence, to gain them, i think it is almost up a vertical hill due to jesting by the 'insensitive' malaysian government... at a time when we are struggling to create an attractive atmosphere for investments and these clowns have to bring up everything, from the smellest shit to the foulest war.
I'm sure our political leaders are almost bursting their heads when the malaysian cout brought up the dirty 3 letter word when halfway across the globe, another is going underway and it may be a good time to pull the participants' investors over to our side.
Resign if we must for we have such STUPID!!!! negihbours...
End of rant -
To CX,
I hear you. But bear in mind that the government is cash strapped. Or else it won't bother with having gst at this time.
I remember back in 1998, the Malaysian government suspended taxation for one year. That helped pull the country out of recession. I for one can see how if we reduce our military budget by 1% and use the money to give tax breaks as well as top up CPF, not to mention use the money to help tje retrenched. There are 800 people out of job in PSA you know.
In all my posts I have not asked for the abolishment of the SAF. But we can definately pospone some of the upgrades and white elephants. The money will be better spent on the needy.
I am still pissed at my mistreatment 4 months ago .. but I am truly very sad that it takes such a situation to knock some sense into people that our ECONOMY is NOT doing well. -
To warspite,
What you have described is TRUE with regards to MNC owned factories. Indeed, the Malaysian PM or DPM has repeatedly told his people that they can never live off FDI anymore.
What you and most of us do not realize is that their SMI industries are gaining strength. Alot of factories owned by USA companies in Penang have been sold to Taiwanese or Malaysian owners. They are now doing contract manufacturing for the MNCs. The local Malaysian (Chinese of course) owners get money, workers get paid (not as much as in MNCs .. but better than nothing) and MNCs keep their costs down. Gloomy yes, but not the end of the world.
As for cars, yes, AFTA is coming and proton is shaking in their pants. But that is good news for Malaysian consumers. They get cheaper cars. And will the car manufacturers get into Malaysia scott free? Already Honda has a plant in Malacca. And I read in the FEER that BMW has to shift their spare part distribution centre from Singapore to Malaysia. (not to mention set up their data centre in Cyberjaya) Kia will be setting up shop in Malaysia as well.
Beside the SMI tax breaks the Malaysian business men get from their government, they are also diversifying to different countries. In the FEER, it was noted that Malaysia is the second biggest investor in South Africa. They are exporting lots of their palm oil and also their consumer electronics. Not to mention that they are looking for new avenues of growth like islamic banking and tourism.
We seem to have the same kind of policy for many years. Dependance on FDI from USA, and put all the hope on GLCs and MNCs to perform. FT to head the corporations and cheap FW to man them. With China and India ascending, I am not confident that those policies are going to work this time. -
And to those who think that it is so easy to uproot a factory out of Singapore/Malaysia into China, think again. I was told that there are now some factors that start to make the USA MNCs think thrice before doing it.
a) There is now an import tax for equipment that is NOT the latest technology or not new enough going into China. Basically, the Chinese government does not want to be a dumping ground for low tech and is implementing a tax for old equipment so they can move up the food chain fast. So factories being set up in China have to have new equipment. So how can you now pack up a whole factory and shift into china? You still can use the slightly older machinery. If you wish to do so, you have to pay tax.
b) There is a horrible tax for payments made to vendors/HQ out of china. Basically, the china government can stop any huge payment citing witholding tax and currency controls. That makes it tough for companies to operate
c) As far as interlectual property is concerned, I was told that alot of companies will not put plants into China that have information stored in the database for fear of being copied. Indeed, this will limit the number of high tech plants operating there. If you do notice, most of the R&D centres for non microprocessor research is done in INDIA .. the Americans trust the Indians more than they trust the Chinese (as far as copyrights are concerned).
So with all this factors, Malaysia and Singapore (as well as the Philippines and Thailand) will still have some surviving plants. -
Originally posted by kenhor:To CX,
I hear you. But bear in mind that the government is cash strapped. Or else it won't bother with having gst at this time.
it can be for the purpose of reducing budget deficit...
I remember back in 1998, the Malaysian government suspended taxation for one year. That helped pull the country out of recession. I for one can see how if we reduce our military budget by 1% and use the money to give tax breaks as well as top up CPF, not to mention use the money to help tje retrenched. There are 800 people out of job in PSA you know. moving govt spending from one department to another department is equivalent to chopping ones left hand to be grafted to the right hand... pretty stupid right?
In all my posts I have not asked for the abolishment of the SAF. But we can definately pospone some of the upgrades and white elephants. The money will be better spent on the needy. by getting fellow citizens in military related sectors get fired.... to spent on the needy?? think we might end up with even more needy...
I am still pissed at my mistreatment 4 months ago .. but I am truly very sad that it takes such a situation to knock some sense into people that our ECONOMY is NOT doing well. our economy isnt in its best... but then.. your idea aint relief either -
to kenhor,
Your points are most refreshing. Couldn't help but agree with 'em.
As for the path Singapore should take, I think we should encourage our local SMEs to do more R&D, to create new products. We should be starting new technology trends and not follow em. The government should give its support through technology grants to these companies thru' arrangements that is beneficial to both parties. The companies get the money needed and the government get to reap the rewards when breakthru in innovations and technology is achieved. Sure there are risks, but isn't this what the Government has been harping about in recent months, entreprenureship. And you know what, the SMEs should rope in the educational system into it. What is more appropriate than getting our ITEs, Polys, and Universities involved?
Currently, our Poly and Uni undergraduates have to do their third year project. AFAIK, only a small percentage of them are involved in industrial projects, sponsored by the related industry. The majority simply take up whatever projects their lecturers think up (which you have to admit some are simply CRAP!!!). I remember a project I saw in SP back in '93, the group project was, of all things, a chilli cutter!!! Isn't this an insult to the Polytechnic, as well to the students involved. Couldn't they come up with a better idea?
Why don't we get the current generation to come up with new ideas? Get these students into the picture of greater things, the industries with experience and technology know how combined with the new ideas and thinking of a new generation, may come up with new products that hopefully could set a new trend worldwide. Wasn't this how Sim Wong Hoo, Michael Dell, Bill Gates and Steve Jobs started out their empire? -
Singapore finally realizes that what it takes to help us now is not cloned cogs turned out by our educational system but actually people with some intellectual individualism...
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With all the talk of the "Talent Pool" being limited in Singapore, and with almost little respect given to any alternative opinions from the Electorate (more so when coming from Singapore Citizens in the Opposition Parties), it is little wonder that those few talented ones chosen to be in the Political Leadership, get themselves bogged down deeper in the present economic quagmire that we are in.
Forget about the losses incurred by the "Talented Few" that is managing Singapore's GLC investments made overseas.
Simply look at the financial wastes that have occurred in Singapore alone.
The National Library was renovated at great cost during 2000 (S$10,000,000?), and it is now earmarked to be torn down.
The PIDEMCO Centre, at the corner of Chulia Street and South Bridge Road, was also renovated at great expense (about $20,000,000 ?) between 1999 to 2000, and it is now torn down to its foundation.
What is the occupancy rate of all the buildings built with Public Money ?
Monetary Authority of Singapore Building or MAS Building
Treasury Building - both at Anson Road
POSB Building (now renamed Capitol Building) at Cecil Street
Singapore Airlines Building at Robinsons Road
CPF Building at Robinsons Road
Revenue House at Thomson Road
HDB Hub at Toa Payoh
the vacated HDB Centre at Bukit Merah
Environment Building at Newton Road
DBS Building at Shenton Way
PSA Building at Keppel Road
now we are seeing a new NTUC Centre being constructed at Collyer Quay-Shenton Way.
Mega-projects are underway soon, with the tearing down of the National Stadium, which is less then forty years old.
Have we too much money in the National Reserves, or are the revenues of these GLC's independent from the accounting of the GIC and the National Reserves ?
Are we led by the truly "Talented", or is the selection process based on obedience and superficial allegiance to mere politics, and not National Duty and Patriotism ? -
well, i dun see how military nuts posters' opinion has any effect on what the gov does. i mean. even if they agreed with u at that point, the gov may still hv continued to spend good cash on the saf mah. get what i mean?Originally posted by kenhor:4 months ago I predicted this and posted a whole thread on how Singapore spends too little on its economy and too much on its military. I got blasted from all the military nuts in this forum.
I only have one thing to say to them.
You buggers have shot the messanger and brought this doom upon the rest of us. I hope that you are now satisfied and will regret your actions for the rest of your life.
The most childish amongst them even said this "Our economy is strong .. we do not need to do anything to boost it but we need to keep our military strong as the #*^@* up north are untrustworthy and will attack us"
Well, to the misguided juvenile, I hope that you are happy now. -
There are talents in Singapore, but most will find difficulties of getting support from the Banks, Venture Capitalists, Government Departments, and local industries.
The recent news items of the experiences of the enterprising Young – of their difficulties encountered in starting up their own ventures – has been reported since the 1970’s, when the famous SIM WONG HOO had to leave our shores to get his CREATIVE Ideas accepted and FUNDED in the USA.
Thirty years have passed, and still the local culture of supporting LOCAL entrepreneurship is non-existent.
It is not so much a lack of Singapore talent in entrepreneurship, but a serious lack of special talent and experience of people managing the Banks, Venture Capitals, and Government Departments to support Singapore Entrepreneurs.
The present managers of the Banks, Venture Capitals and Government Departments to support local enterprises, do not seem to have any “acumen” or “spirit” to see the spark of opportunity of local talents.
Singapore Banks are not risk takers, insofar as supporting local entrepreneurs.
This explains for the large numbers of business bankrupts that are made by Singapore Banks, who are quick to “remove the umbrellas given during the sunny days, and now hurriedly withdrawn in the middle of a storm”.
Our Finance Minister had made the most brilliant statement that the Singapore Government cannot be seen to interfere in what is normal buiseness transactions by banks to recover bad loans.
This was made in the middle of a financial storm brewing and hurting all debtors to the banks.
Much has been spoken by the Government leaders, when they lament about the lack of entrepreneurships in Singapore, and the lack of talent.
Yet it takes talent to spot the winner, and sadly many who were made out to be the “Talented Choice with Potentials” during the Election, have now fallen by the wayside.
One can only wonder where the Talent in making those poor choices is. -
nobody's right, nobody's wrong. Who here can sincerely vouch that they can do a better job than the current government in all areas? Maybe certain areas u all got better ideas but thats because you all did not take everything into consideration. Lets look at Singapore as a big company with Strategic Business Units. A big company doesnt have Strategic Business Units that are ALL making money. A good example is Gillette which owns SBUs like Oral B, Duracell and Parker Pens and many more. Parker Pens was sold off recently, but the question is why keep a SBU which is not showing much growth and instead eating money of a company. Being a strategic business unit, Parker Pens was kept until recently precisely for being strategic to use as a tool against competitors, in case the competitors tries to attack Gillette on other fronts.
Thus Singapore have many SBUs too. The retail industry, they Life Sciences Industry, the Defence Industry, The IT industry, the Manufacturers industry and many more. Doesnt mean a certain area which seems less important means its not worth putting more money in, sometimes it is for the sake of strategy. Some SBUs will be kicked out in time when the government deems fit just like they did long time ago with the textile industry.
What I wanna say is that whatever has been presented here by all of you are not without merits but the decision making process of running a country is pretty much complex and requires strategic and tatical planning, requiring relational and not terminal thinking.
The current government has done well in such times. Look around the SEA region at least, who has survived these times better than us? Perhaps, they could have done better, but hey who here sincerely would jump at a chance to stay in another country in the SEA region rite now? Until someone can prove that they can lead a country and not just attack certain sore points, the government now remains the best we have. -
Exactly my thought too.Originally posted by gasband:The current government has done well in such times. Look
around the SEA region at least, who has survived these times
better than us? Perhaps, they could have done better, but hey who here sincerely would jump at a chance to stay in another country in the SEA region rite now? Until someone can prove that they can lead a country and not just attack certain sore points, the government now remains the best we have.
The idea of me sharing this article from a Malaysian source is to
highlight the fact that many Asian countries, in particular, Singapore's hyper-sensitive northenly neighbours has used it as a
benchmark for its measurement of success. That itself, IMHO, is a
testimony of Singapore's reputation of her economic powess and
governence institution competency. Many hadn't think twice before
putting foth their simpliestic argument that defence expendition
or "white elephants" should be reduced. Don't these people realise
that we are living a dangerous time ?
It is preciously of reasons why Singapore institutions are capable
of consistent and sound policies executions and her unquestionable
seriousness towards security that earned herself as the safe-
heaven in such haste and unpredictable region. Doesn't anyone
remember how FM Jayakumar said in his reply to a Malaysian
reporter during the PB Special Agreement signing ceremony
in KL about Singapore's openess and the goverment "never duck"
from issues like terrorism, economy or even the water issue with
Malaysia ? It is unfortunate that the Malaysian press only
prints articles that be-littles Singapore whenever it is possible.
And much to my dismay in fact, the Malaysian also decides not
to print PUB's water supply to Johor only last month, the very
month when Newater began to be piped into Singapore's reservoir.
There couldn't be a better irony. -
Originally posted by Atobe:
the amount sought in a such high risk start-up is hardly peanuts... in the 1970s, no prudent bank in Sg would've bankrolled such ventures. put into perspective, this is hardly surprising.
The recent news items of the experiences of the enterprising Young – of their difficulties encountered in starting up their own ventures – has been reported since the 1970’s, when the famous SIM WONG HOO had to leave our shores to get his CREATIVE Ideas accepted and FUNDED in the USA.
even in recent times, with the rise of the tech bubble, US venture/vulture capitalists have often been at the forefront of funding such start-ups. the reason is obvious actually: it takes a LOT of money and a LOT of good ideas to make it work... and i'm not talking about the start-ups... i mean the V.Cs.
basically, there is an "attrition" rate of close to 80%... which means that 8 out of 10 of the ventures they fund, flop.
and they'll make money by ripping off the remaining 20%... so that the silicon valley geek who started it all might end up owning only what? 5-10% of the company in the end ah... the sweet world of a vulture capitalist...
its difficult to picture Sg in the same light... u need a concentration of very bright people, the availability of easy funding and most importantly, timing.
the first 2 might be possible... the last one, i hope it happens within my limited lifespan...
but don't get carried away by the successes... remember the stats... for every 1 successful startup, 4 flopped. and the dot.com is not the only way to succeed... -
To Gun,
You said, Many hadn't think twice before putting foth their simpliestic argument that defence expendition or "white elephants" should be reduced. Don't these people realise that we are living a dangerous time ?
We are living in dangerous times. But what is the MAIN danger nowadays? I fear more for terrorist attacks than a neighbour launching invasion. A hijacked airliner is a more credible threat than an invasion.
With that in mind, it is indeed foolish to spend on white elephants such as a submarine. Will that deter the terrorist from blowing up targets? Will a JSF be able to stop a plane from crashing into CBD even if we shot it full of missiles?
As we live in such dangerous times and with a new threat, as well as great disatisfaction among the populace, I see that its time to change the mindset and get rid of the white elephants. -
For those who think that the article above is biased, here is one by the Far East Economic Review .. enjoy
ASIAN ECONOMIC OUTLOOK: SINGAPORE
Elusive Recovery
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By Trish Saywell
Issue cover-dated February 13, 2003
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IN HIS ANNUAL New Year message, Prime Minister Goh Chok Tong told Singaporeans that there was a "reasonable chance" 2003 would be better than 2002, but that most likely they "will have to wait till 2004 for a full recovery."
The Monetary Authority of Singapore, the country's de facto central bank, is forecasting GDP growth of between 2% and 5% this year. In 2002, the economy grew an estimated 2.2%--a rebound from 2001 when Singapore was badly stung by its worst recession since independence in 1965.
In its twice-yearly macroeconomic review in January the Monetary Authority predicted the economy will remain sluggish in the first half of 2003 before a more "firmly grounded" recovery ensues in the second half--assuming improved external conditions. "The frequency of shocks buffeting the Singapore economy has increased since the mid-1990s," it said in its report.
Weakening of global electronics demand in information-technology markets has become a particular bugbear, as Singapore, like many other Asian countries, has over the past decade increased production of semiconductors--the prices of which are highly volatile and react strongly to production cycles in developed countries. Singapore's domestic electronics industry makes up almost 10% of the trade-dependent nation's GDP; and related industries such as fabricated metals and machinery together constitute another 4.6%. Singapore's key nonoil exports rose a less-than-forecast 4.4% in December--bringing total nonoil exports for 2002 to S$98.6 billion ($57 billion), up 1.9% year on year.
Economic uncertainty and geopolitical concerns will likely impede the investment plans of both foreign and domestic companies this year, the Economic Development Board warns. The government agency responsible for attracting investments to the island says it expects fixed-asset investment in the manufacturing and services sector and total business spending to fall this year to S$9.9 billion from S$11.1 billion last year.
Concerns over economic recovery and further terrorist attacks, meanwhile, continue to dampen domestic consumer and tourist sentiments. Unemployment remains a worry. At the end of September, the unemployment rate reached 4.8%--the highest level since December 1986. The Ministry of Manpower stated recently that a record 12,900 graduates were jobless in September, more than double the 6,300 in the same period at the height of the Asian financial crisis in 1998. Worse, Singapore faces looming structural unemployment problems as the country continues to move from low-skilled manufacturing jobs to value-added industries that require smaller numbers of workers and higher skills.
In his message on the eve of the New Year, the prime minister also warned that Singapore will have to address its higher cost structure compared with other countries in the region. "Our manufacturing workers are paid 13 times more than workers in China," he said. "Our workers are more productive, but the Chinese are catching up fast. Companies are feeling the pressure to shift their Singapore operations to China to save costs." -
Originally posted by CX:
The risks of running any investments are never too high.
the amount sought in a such high risk start-up is hardly peanuts... in the 1970s, no prudent bank in Sg would've bankrolled such ventures. put into perspective, this is hardly surprising......
.....basically, there is an "attrition" rate of close to 80%... which means that 8 out of 10 of the ventures they fund, [b]flop.
and they'll make money by ripping off the remaining 20%... so that the silicon valley geek who started it all might end up owning only what? 5-10% of the company in the end ah... the sweet world of a vulture capitalist...
its difficult to picture Sg in the same light... u need a concentration of very bright people, the availability of easy funding and most importantly, timing......
....but don't get carried away by the successes... remember the stats... for every 1 successful startup, 4 flopped. and the dot.com is not the only way to succeed...
[/b]
If an entrepreneur is prepared to risk all that he has in a venture of his own under taking, then an Investment Bank (not just any ordinary Savings or Commercial Bank) should also be prepared to take risks for being in its declared business of Investing.
Instead of all talk and no action on the part of our Government, they should implement a safety net scheme that is similar to the Export Insurance Scheme - in which exports to high risk countries will be insured against default in payment, just so to help in the export development of local industries.
Such an Entrepreneurial Venture Capital Insurance Scheme will help any Venture Capitalist or Investment Banks that support any young budding entrepreneur to see its plans into fruition.
It is ridiculous to expect every venture to succeed, and even if the attrition rate is high as claimed by CX, should the entire venture and entrepreneurial spirit be paralyzed?
This is where the Government role should come in, to help the Private Enterprise to develop, and not coming in with their GLC to muscle out the individual enterprises.
Time is always of the essence, and this is where the inexperience of our local Venture Capitalists and Investment Banks reveal their weaknesses.
The various Government bodies are not exactly examplary in their attitudes, with the long process involve even in implementing the computerisation program of local enterprises that is encouraged by the National Computer Board.
In supporting the local entrepreneurs, the homegrown ventures will form the core of the industrial strength of Singapore, much like those of Taiwan, Japan, Korea.
The size and numbers of such core industries should be the basis in which the level of workersÂ’ wages is determined.
It is amazing that in the past, the Government should have clamored for workers’ wages to be pegged based on higher technical skills, by stepping up the manufacturing chain to a higher value added process; even when such manufacturing chains are entirely dependent on the investment of a transient multi-national industry that will easily transplant itself to another lower alternate cost center for the same process – when such a lower cost center is available.
High wage policy can only succeed when the investments are in the hands of our own local entrepreneurs, and even then the costs will have to be sensitively controlled to enable it to compete on the world stage.
The past high wage policy is based on a hollow local home grown industry.
Enticing the populace with a political goal of a Singapore Living Standards being equal to Switzerland, and a Wage Level to match, is asking for trouble when the substantive base for such a condition do not exist in Singapore as in Switzerland.
Furthermore, the Singapore Government did not educate the populace that the consequence of a High Swiss Standard of Living is accompanied by the politically sensitive Higher Costs of Living in Switzerland, when compared to the neighbors around Switzerland.
Unfortunately for Singapore, our political system do not allow for alternative views.
We have used the Swiss standards as our model for most of our endeavors, but unfortunately its political system of consultation with its citizenry was not followed as well.
In Singapore, the Government is omni-potently knowledgeable in all matters, and its views are beyond fault until proven wrong, and too late. -
Has matters developed so rapidly in a short period of two and a half months ?Originally posted by kenhor:For those who think that the article above is biased, here is one by the Far East Economic Review .. enjoy
ASIAN ECONOMIC OUTLOOK: SINGAPORE
Elusive Recovery
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By Trish Saywell
Issue cover-dated February 13, 2003
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IN HIS ANNUAL New Year message, Prime Minister Goh Chok Tong told Singaporeans that there was a "reasonable chance" 2003 would be better than 2002, but that most likely they "will have to wait till 2004 for a full recovery."
The Monetary Authority of Singapore, the country's de facto central bank, is forecasting GDP growth of between 2% and 5% this year. In 2002, the economy grew an estimated 2.2%--a rebound from 2001 when Singapore was badly stung by its worst recession since independence in 1965.
In its twice-yearly macroeconomic review in January the Monetary Authority predicted the economy will remain sluggish in the first half of 2003 before a more "firmly grounded" recovery ensues in the second half--assuming improved external conditions. "The frequency of shocks buffeting the Singapore economy has increased since the mid-1990s," it said in its report.
In his message on the eve of the New Year, the prime minister also warned that Singapore will have to address its higher cost structure compared with other countries in the region. "Our manufacturing workers are paid 13 times more than workers in China," he said. "Our workers are more productive, but the Chinese are catching up fast. Companies are feeling the pressure to shift their Singapore operations to China to save costs."
On New Year's Eve, our PM Goh had reported that Singapore's economy will have a relatively good chance of doing better in 2003 then in 2002.
In an interview with the local press, after his recent visit to Hanoi, he warned of more job losses to come by mid-2003 - is this what he meant to be doing better then in 2002, as said in his New Year's Eve speech?
Just about two days ago, it was announced that MAS will be reviewing its forecast that Singapore's growth will need to be revised downwards to probably slightly below 1 Percent.
We have barely crossed the First Quarter of 2003, and all signs are already going downhill.
Is the picture worse then the Government is prepared to reveal ? -
Originally posted by kenhor:
and how would u, oh great enlightened one, guard against hijacking?
We are living in dangerous times. But what is the MAIN danger nowadays? I fear more for terrorist attacks than a neighbour launching invasion. A hijacked airliner is a more credible threat than an invasion.With that in mind, it is indeed foolish to spend on white elephants such as a submarine. Will that deter the terrorist from blowing up targets? Will a JSF be able to stop a plane from crashing into CBD even if we shot it full of missiles?
a sub is hardly a white elephant... and it was bought some years ago at a BIG discount.
subs are force multipliers. its able to cover more sea than a surface vessel cos there's no easy way for u to find it. one sub in a body of water is already able to cause the crew of enemy warships to take overwhelming precautions far out of proportion to the odds placed against them.
the JSF is also helping SAVE money. it is becoming increasingly expensive to upgrade and maintain the F-5 and A4... they've reached the limits of their productivity already.
i'm sure u would prefer to live in new zealand... they're so sure of their security, that they've closed down their air force wow...As we live in such dangerous times and with a new threat, as well as great disatisfaction among the populace, I see that its time to change the mindset and get rid of the white elephants.
its only a white elephant to u... and getting rid of the SAF won't solve your problems. as much as u hate it, it also provides livelihood to tens of thousands of singaporeans... regulars, defence contractors and people in related industries.
don't be so narrow minded.
everybody knows that times are tough... u're not the only one hit.
me? i'll rather expend my efforts to solve my problems than to complain that the idiot gov't is not doing enough to help me... they can't possibly do enough anyway.
