Singapore's Senior Minister Goh Chok Tong's advice to US President-elect Barack Obama to pay attention to the economy made amusing reading not just because that is precisely what Obama says he will do but because Singapore is yet to tackle the economic recession at home.
Singapore was the first in Asia to slip into a technical recession. The government-linked DBS Bank is the first Asian bank to announce large-scale layoffs, according to the Financial Times. Relief measures will be announced with next year's budget, the finance minister said. That contrasts with the emergency actions taken by other countries.
No doubt Singapore can take time to come up with a good plan. It doesn't face such acute housing and banking problems as the USA, Britain, Germany and Japan. Nor does it face the social unrest that periodically breaks out in China and Malaysia.
But the government has said nothing about how it will tackle the crisis beyond that
- Singapore has the reserves to see it through the recession
- Singaporeans can't expect the same standard of living they were used to
- Singapore is negotiating the crisis from a position of strength.
The last bit, unless it's referring to Singapore's vast reserves, is open to question.
Singapore is an export-driven economy caught in a global economic slowdown. So how can it be in a position of strength?
Singapore's problem is that bad things do happen even to the best economies. It's the fifth most competitive economy in the world with excellent infrastructure, an advanced banking system, and one of the most transparent economic regimes, according to Transparency International.
What more can it do to boost the economy?
It has been lucky in its leaders, who have led the country out of every crisis.
Now how do they plan to beat back the current recession? Surely, there must be a plan.
A look at some other countries:
- China's $586 billion economic stimulus programme represents 16 percent of China's economic output last year, and is roughly equal to the total of all central and local government spending in 2006, says the Wall Street Journal. It adds:
- The US pushed through a $168 billion stimulus package earlier this year, equal to about 1 percent of gross domestic product, and the Federal Reserve has aggressively cut interest rates, complementing the Treasury's $700 billion for troubled financial institutions.
- Japan has a $51.5 billion package that largely consists of payouts to families and tax relief for businesses
- Germany is moving on tax breaks and loans that will cost the government around $29.9 billion over four years.
Related posts:
