Yesterday I read an interesting article on the Strait Times. The article stated that although Singapore is in its worst slump in history, Singaporeans has not been feeling the pinch yet.
Going by the numbers, Singapore is without question in its most severe recession in history with exports down by 30%, while the Singapore government had to downgrade GNP growth to –6% to –9%. So why aren’t Singaporeans feeling the hurt of the slump?
As the Strait Times usually do, credit was given to the Singapore government for it’s various actions to keep Singaporeans from feeling the full impact of the recession. I have another theory. Singaporeans has not been felling the pinch of the recession yet because things were never that good for them in the first place!
Although there has been 7 years of solid growth for the Singapore economy prior to this recession, most ordinary Singaporeans did not benefit from it. Take this for example; in the article it states that in the past 2 years the average Singaporean’s monthly earnings grew by 5.8%. I know for a fact my salary did not grow by 5.8% and I do not know anyone who did. So how did this 5.8% come about?
The answer to that is simple. For the past 7 years, the numbers had been great but those numbers are due to foreign money entering Singapore. As foreign money enter Singapore, this naturally boost the Singapore numbers to something beyond what it truly was. I mean Singapore is now on listed as a country for money laundering. I’m willing to bet that one reason why the numbers are so bad for Singapore now is because foreigners are now pulling out their money from Singapore back to their home country. Hot money coming in is usually the first to go out too.
To give credit where credit is due, the Singapore government has been putting in various schemes to help Singaporeans but the real reason why Singaporeans hasn’t been feeling the pinch yet isn’t because of them. It’s because we never fully benefited from the 7 years of growth in the first place.