The economics headlines for Singapore have been bad. The predictions for 2017 are gloomy. Still… i have this nagging feeling that we are not getting the full picture ( or our Gov is not telling the whole truth).
The story in the mainstream media is one of a temporary downturn caused largely by external and global factors. Certain industries are doing well enough. The signs seem to suggest otherwise.
I would argue that the downturn is due to structural factors within Singapore, made worse by the external and global events. The slowdown in trade and port activities is not new. Shipping has been in a slump for awhile now and Singapore has long lost the title as top volume container port. The sale of local champion NOL speaks volume of our prospects as a shipping port. The Trump effect turned out to be having uplifting effect on thr market so far. US is doing fine but things are not trickling to Singapore. The China slowdown factor is not exactly the biggest thing now because if you go China you find a booming service sector . Their manufacturing sector is quite a bit of turmoil but overall they are fine. HK projected growth is slightly higher than Singapore for 2017.
So why is Singapore blaming all these factors for slow growth and downturn?
Singapore is facing some fundamental issues. The disadvantage of having a small market with no special access to a bigger one is showing badly. (That’s why Asean is damn important and HSR is too). Funds park in Singapore for incentives but otherwise has no interest to benefit in local economy due to lack of perceived opprtunities for investment.
Services are not as competitive as before because we have Malaysia and China busy urging corporate to buy services locally. Our traditional middleman role is being undermined by technology, at the same time tech firms are slow to move into Singapore.
The so called sectors doing relatively well as locally oriented one such as education and healthcare. The reasons are obvious due to local spending but effort need to be put in to sell these services to our neighbours.
This is not predicting the doom of Singapore. In fact i believe in the strong fundamentals of Singapore. But until the structural issues have breakthrough, i find it hard to see that Singapore will enjoy normal growth again. The 0.5% growth rate means that job market will be more competitive and not everyone will get good jobs. Bonuses will not that good as well generally. Singaporeans will better be working harder for your own lunch!