Singapore and the global economic crisis

Is Singapore affected by the global economic crisis?

Is there a place on this planet not affected by the crisis?

Obviously, every country in the developed world is hit hard by the effects of the current crisis - which started in the U.S. housing market in 2007 - due to its enormous scope and international scale. Many economies are in really deep trouble because they’re in bad shape to master the economic turmoil. Ireland, Iceland, England and the United States suffer from the former strength of the financial sector, export countries like Japan and Germany which both turned to other countries for growth with domestic demand having been week for m

ore than a decade, are now seeing their exports slump and unemployment rise. C

hina whose export-led boom is coming to a standstill is being confronted with structural problems as the economy struggles to cope with the growing number of job seekers entering the labor market each year. Portugal, Greece and debt-laden Eastern European economies threaten the stability of the eurozone and the European Union itself. South Korea’s currency crashed and Taiwan finds itself being pushed into the arms of China which is the kind of partner the small high -tech nation needs to maintain its prosperity. Unemployment in Taiwan, which China considers a renegade province, is at an all-time high.

vessels laying at anchor outside the port

Singapore’s economy is among the most diversified in the world. The service sector makes up about two thirds of its economy while the industry sector accounts for one third. Next to financial services, electronics and science, trade, chemicals, construction and the oil industry are major branches. Singapore is a financial hub for Southeast Asia, a major trade hub and a renowned location for research and education. Due to its strategically perfect location, all Europe-Asia sea trade passes through Singapore, making its port the world’s busiest container port. It also transships half of the world’s annual crude oil supply while handling about 20% of containers shipped globally. The Southeast Asian citystate’s educational system is among the best in the world, the public transport system (MRT, buses, taxis) is very efficient and reliable. Nevertheless, Singapore is not immune against the collapse of global trade. Since Singapore has the highest percentage of external trade in the world - 3.25 times its GDP - the impact on the country’s economy is enormous.

Port of Singapore, the worlds busiest container port, transshipping 20% of containers worldwinde and 50% of the worlds annual crude oil supply

However, roaming the streets of Singapore, I really did not notice that the country is in a very deep recession right now. There’s hardly a place on the island where there are no impressive construction projects underway. On the city’s numerous construction sites, work is continuing 24 hours a day, 7 days a week. The streets and MRT trains are extremely busy during rush hour, the Central Business District is bustling as always and shopping malls are packed. To be honest, I’ve never seen a place with that many shopping malls. I’m pretty sure that Singapore has the highest density of shopping malls in the world. And - at least that’s my impression - since Singaporeans are obsessed with shopping and eating, retailers, food chains, restaurants and food stalls are still making money.

Undoubtedly, Singapore’s economic success story will continue. However, the government might have to deal with new challenges. Contrary to what I expected before coming to Singapore, I saw a few apparently homeless sleeping at the City Hall MRT station overnight - a rare picture in the affluent citystate where there are actually no homeless people on the streets. But from what I learned during my stay, housing is extremely expensive in Singapore which is one of the reasons why about 85% of Singaporeans live in public housing. The HDB (Housing and Development Board) task is to bring down the cost of accommodation for citizens.

Singapore Public Housing (HDB - flats)

HDB flats, view from Mount Faber

To sum up, Singapore is in the best shape of all countries to master the storm and emerge stronger than before once the dust settles. The nation has huge cash reserves, a highly qualified and industrious population and smart politicians in charge. Moreover, investments of the past and present will continue to increase the competitiveness of the Southeast Asian citystate.