There is every reason to believe the Singapore government will choose hope over fear when it unveils this year's budget tomorrow.
The rose-coloured spectacles have fallen off at last that induced officials to think the economy might still grow this year, despite the global downturn.
Now the economy is expected to shrink sharply, by two to five percent, this year, says the Ministry of Trade and Industry, which only two weeks ago was predicting between one percent growth and a two percent decline in the economy.
It is astonishing how a smart government like Singapore's with a reputation for economic acumen could get things so wrong that it had to change its annual economic forecast only two weeks after making the prediction.
But the government has come out of denial now — and prepared to confront whatever the future holds, no matter how dark and uncertain it seems.
The hope now
And that gives hope. Bloomberg reports today:
Finance Minister Tharman Shanmugaratnam may outlay as much as 20 billion Singapore dollars ($13.3 billion), or eight percent of the gross domestic product, to help households and businesses survive the slump, Macquarie Capital Securities predicts. The government may also say it plans to tap into its reserves for the first time to fund its expenditure.
As Franklin Delano Roosevelt said long ago: "The only thing we have to fear is fear itself."
Singapore's leaders, who include scholars and meritocrats, will be familiar with the quote — and know, from experience, that it's the truth.
The wisdom of experience
Minister Mentor Lee Kuan Yew became Singapore's first prime minister when the island became a self-governing part of the British empire in 1959 and led the nation for 31 years before stepping down in 1990.
His successor, Senior Minister Goh Chok Tong, has been a minister since 1977.
Prime Minister Lee Hisen Loong, who succeeded Goh in 2004, has been a minister since 1984.
They have experience and put it to good account, pulling Singapore out of the Asian economic crisis in 1988 and the economic downturn in 2001.
Once more they are being put to the test — but if anybody can be expected to be ready for the challenge, they can.
"300,000 jobs, 200,000 foreigners to go" in worst recession
Singapore faces its worst recession since independence in 1965, say reports.
About 300,000 jobs may be lost by 2010, and 200,000 foreigners and permanent residents forced to leave Singapore, Credit Suisse Group said in a report yesterday.
Singapore faces a devastating exodus of foreigners, reported The Times.
But the consequent drop in Singapore's population, currently 4.84 million, will give people more room to breathe, the island has been getting too congested, quipped a local wag, commenting online on the news.
The foreigners will return when the economy recovers, said an analyst with a rival multinational bank quoted by the freesheet, Today.
Great place to do business in good times
"Singapore's a great place to do business when the cycle picks up, so these guys should return," he said.
Yes, but Singapore hasn't looked like a great place for business to foreign investors for some time now.
Foreign direct investment in Singapore has fallen dramatically, AFP reported yesterday quoting preliminary annual data released by the UN Conference on Trade and Investment:
China (up 10 percent, 82 billion dollars) and India (up 60 percent, 36.7 billion dollars) attracted more FDI in 2008.
But Indonesia (minus 21 percent, 5.5 billion dollars) Singapore (minus 57 percent, 10.3 billion dollars) and Thailand (minus four percent, 9.2 billion dollars) were the exceptions in Asia with declines.
Singapore will have to depend more on itself.
It has the leadership to do so.