The global economic downturn is certainly doing a number on Singapore.
Prime Minister Lee Hsien Loong yesterday said the situation looks even gloomier than only two weeks ago, when the government forecast between one percent growth and a two percent drop this year.
The forecast will be revised next week in view of unexpected developments, he said, citing the 20 percent drop in non-oil domestic exports last month. It was the sharpest drop in seven years. Most economists now expect the Singapore economy to shrink by three percent, reports the Straits Times.
The government suddenly seems as clueless about the economy as ordinary people. The old assurance is gone. And I oddly find that comforting.
Instead of crowing about Singapore exceptionalism — Singapore being number one in this or that — it’s time to harp on home truths.
PM Lee acknowledged how dependent Singapore is on the rest of the world. “Growth numbers have come down all over Asia,” he said. “All our major trading partners are seeing this tremendous downturn.”
Singapore can only recover with the rest of the world.
Who knows when that will be?
Even economists are divided on how to fight the downturn, with the Keynesians pressing for stimulus packages and others sceptical of government intervention.
In the face of such uncertainty, how can Singapore not flounder?
No doubt, the government has bungled, having to revise economic forecasts that are only two weeks old.
But PM Lee has candidly admitted the government has been caught unawares by unexpected developments such as the sharp fall in December exports.
And people are more likely to trust leaders who level with them.
Clearly the government means well. It is urging companies not to retrench workers but to reduce wages and the working week if necessary.
Of course, there’s an element of self-interest here. Take, for example, the decision not to cut the CPF. The workers’ pension fund should not be cut, it is said. But the money flows into the government’s coffers, for investment, before workers eventually get it.
But there’s nothing wrong with that. Everybody benefits.
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I am not impressed with the Government’s actions so far.
They seem so reactive, like don’t know what hit them most of the time and put excuses on unexpected circumstances.
Man, the subprime happened moons ago.
I think we need a crystal ball more than a DIV I government.