The Economist as usual has figures to show how Singapore could be hit by a US recession. It says:
Some Asian economies are more vulnerable than others: Singapore, Hong Kong and Malaysia have exports to America equivalent to 20 percent or more of their GDPs, compared with only 8 percent in China and 2 percent in India. There are already some ominous signs. Singapore’s exports to America are down by 11 percent over the past year, while Malaysia’s fell by 16 percent. Exports to other emerging economies and to the European Union surged, so total exports still grew by 6 percent in both economies. But that was much slower than at the start of the year, and the worry now is that demand from Europe has started to flag.
But it says there is
“reason to be optimistic that domestic demand (consumer spending and investment) is likely to remain strong and governments have more flexibility… Take Malaysia: exports to America plunged, yet its GDP growth quickened from 5.7 percent at the end of 2006 to 6.7 percent in the third quarter of last year.”
Singapore has a tradition of spending on infrastructure to help the economy through hard times. But consumer spending will have to go up, too, to offset any drop in exports. Spending more will not be easy for everyone. A Reuters story last November noted:
Two years of blistering economic growth and a government policy of attracting wealthy expatriates have created a new class of super-rich, while a string of price increases for everything from bread to bus fares have made life harder for the poor…
The proportion of Singapore residents earning less than S$1,000 ($690) a month rose to 18 percent last year, from 16 percent in 2002, central bank data released late last month show.
At the same time, the proportion of those earning S$8,000 and above rose from 4.7 percent to 6 percent in the same period…
Despite sporting a first-world GDP per capita of $29,000 — second only to Japan in Asia — Singapore has an income inequality profile more in line with third-world countries.
Singapore’s Gini coefficient, a measure of income inequality, has worsened from 42.5 in 1998 to 47.2 in 2006, and is now in league with the Philippines (46.1) and Guatemala (48.3), and worse than China (44.7), data from Singapore’s Household Survey and the World Bank show.
Other wealthy Asian nations such as Japan, Korea and Taiwan have more European-style Ginis of 24.9, 31.6 and 32.6.
Technorati Tags: gini coefficient,income
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