Hope over fear, Singapore!

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:

Singapore said its economy may shrink an unprecedented five percent this year, fanning speculation the government will announce record spending in its budget tomorrow to help companies hurt by the global recession.

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.

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