Singapore: Mixed Signals

1999

Professor Carl A. Trocki

The New Year opened with mixed signals for Singapore's economy. Despite surging stock markets around the world which drove the STI to a ten-percent gain, hitting over the 1500-mark in less than two weeks, other indicators suggested that the Asian economic crisis still had a way to go.

Singapore workers are continuing to feel the pinch as Matsushita Electric laid off another 56 workers, in addition to 190 already dropped in 1998, while Delphi Automotive cut 229 workers. Labour chief Lim Boon Heng predicted that as many as 10,000 more jobs might go in 1999, in addition to the 20,000 lost in 1998. The government continues to counter sackings with measures such as job fairs and has pushed ahead with its overall program to cut the costs of doing business in Singapore. In addition to a fifteen percent wage cut, the Parliament has passed the Retirement Age Bill which will allow companies to cut the wages of employees over the age of 60. Lim indicated that Singapore workers will continue without a safety net in the coming months, rejecting ILO suggestions for an unemployment insurance scheme.

Things were also bleak for small businesses as Official Assignee figures showed that there were 2,372 individual bankruptcies during the first eleven months of 1998. This was more than double the number for the same period in 1997 and 90 percent more than the whole of 1996. The largest percentage of these were small business failures.

Always the innovator in forms of social control, Singapore has introduced what appears to the world's first Electronic Road Pricing (ERP) system. As the car passes under an overhead gantry, an electronic eye scans the car and automatically charges the driver's CashCard, which is inserted into a slot in the car. Unfortunately, the Land Transport Authority neglected to tell drivers that the scan actually begins about ten metres before the gantry. This led to complaints from numerous unlucky drivers who were photographed and fined for failing to insert their cards well before their cars passed the gantry.

Notwithstanding this extension of the government's control, other reports show that the crime rate for 1998 was up 4 percent after nine years of successive declines. Of more concern, perhaps, is the report that more young people are trafficking in drugs, over one-third of those arrested being under 29. These young drug lords are known to splurge on expensive clothing, motorcycles and electronic goods. Perhaps this is one answer to the faltering economy?

WATCHPOINT: Competition will increase in the coming months between Singapore and Hong Kong as they seek to position themselves as the premier business and commercial communications centre of Asia. Singapore has already slashed air freight charges in an effort to undercut Hong Kong and has made a promotional pitch to British bankers to make Singapore their Asian headquarters.

 

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