Thursday, April 30, 2009

Singaporeans remain cautiously optimistic

A interesting article hit my WSJ reader this afternoon. From the title "Singaporeans stay buoyant in Asian storm," I was not too sure which direction the article would take.

Here's my take of the article.

The financial crisis has hit Singapore hard. The city-state after all is home to the largest container shipping hub in the world. When global trade slumped, inevitably so would the Singaporean economy.

The Financial Times in this article seems to agree with a observation I have made on my business trips to the city. The average Singaporean works very hard, earns a decent yet not absurdly salary, receives subsidized housing and generally speaking... LIVES WITHIN THEIR MEANS

Much like the average citizen, The city-state has also lived within its means. The Singapore Sovereign Wealth Fund is worth around $100 billion, which Singapore saved up during the good years.

This has transpired in the form of confidence, at least for Singaporeans that is. Foreign expats have ironically been the hardest hit by the crisis, suffering a major exodus after the fall of Lehman Brothers last year. Singaporeans on the other hand are holding up quite well, continuing to spend while waiting for a recovery.

“We suffered a fall in business, particularly among expats, after the collapse of Lehman Brothers in September. But the slack has since been taken up by locals who still have money to spend,” said Chris Churcher, the owner of the Red Sea art gallery.

Cem Karacadag, an economist at Credit Suisse in Singapore, said that Singaporeans are used to living within their means since he estimates half of the working population makes S$2000 ($1,354, €1,022, £914) or less a month in one of Asia’s most expensive cities. About 85 per cent of the population lives in publicly subsidised housing, leaving little risk of foreclosures.

“We are a resourceful people,” said Jeffrey Tan, who owns a small printing company. When business orders started drying up, he decided to take a part-time job as a taxi driver. “It is a flexible job so I have time to devote attention to my business when I need to. The only problem is that fewer people are taking taxis.” Mass transit use has risen as people try to cut costs on incidental expenses.

Click here
to access the FT article which was used in writing this post.