Can Singapore Survive The Recession?

Singapore can survive a recession if the Government comes out with a good Budget Report next month. But what happens if the current recession stretches on beyond the 2 year mark and drags on for a few more years? News reports have led us to believe that the world hasn't seen an economic downturn of this magnitude since the days of the Great Depression in 1929.

The much anticipated Budget 2009 is scheduled to be released a month earlier and every one's waiting to see what's in it for them. Speculation is rife at this juncture as no one actually knows what the Government will do. The local news media have regularly released optimistic reports but no detailed plans have yet been divulged.

During the Asian Economic Crisis and the SARS (Severe Acute Respiratory Syndrome) outbreak here in Singapore, the Government was instrumental in stabilizing the local economy by expediently offering assistance to businesses and employees alike. Much was done to keep the country afloat in those times of hardship and adversity.

Singapore braces for a recession comparable to The Great Depression of 1929

Recent Press Releases

Recent local and overseas press releases have been very optimistic about Singapore's reported investments in both India and China at a time of economic uncertainty. In fact, these press releases have been so optimistic that it has compelled many to question the accuracy of the media sources.

Foreigners who are aware of the absence of a free press in Singapore are also skeptical as article after article in local newspapers speak of a manageable impact that this present recession will have on this tiny South East Asian country whose economy depends on tourism, shipping services, foreign investments and exports.

Can any of these press releases and news reports be believed? Your guess is as good as mine. While it is an undisputed fact that the Singapore Government has enormous foreign reserves, how much of these reserves the Government intends to allocate to buffer this recession remains a question mark on everyone's mind. Will these funds be enough to help companies retain their employees during this downturn and if so, for how long can these funds last? Who's to say until Budget 2009 is announced.

Singapore's Dhoby Ghaut gearing up for Christmas celebrations.

Learning from the Past

The last global recession in 1984 saw hundreds of companies going under. Announcements of foreclosures took up 6 to 8 pages of the newspapers every day for a year. In those days, Singapore was very heavily dependent on the US economy. So when the West went down, Singapore followed suit.

Not wanting to repeat the mistakes made during that recession, Singapore has since been signing FTAs (Free Trade Agreements) with as many countries as it sees necessary in order to divest its economic dependence away from only one major trading partner. Such agreements have been signed with a host of countries across the globe at break-neck speed but is this enough to help Singapore ride out this recession? It's anybody's guess for now.