SINGAPORE (Aug 19): Even as Singapore teeters on the edge of a technical recession, Prime Minister Lee Hsien Loong says there’s no need yet for immediate economic stimulus measures.
However, he adds that the government is prepared, and will “promptly respond” with appropriate interventions if the situation worsens.
Speaking at the National Day Rally 2019 on Sunday, Lee acknowledges that Singapore's economic growth has slowed significantly, but notes that retrenchment and unemployment rates in the city state remain low.
"We have experienced cyclical downturns like this in the past, and we are confident we can take this one in our stride,” he says.
The Ministry of Trade and Industry (MTI) last week slashed its GDP growth forecast for the second straight quarter, as the Singapore economy returned a marginal growth of just 0.1% year-on-year for the 2Q19 ended June, moderating from the 1.1% y-o-y growth in 1Q19.
MTI downgraded the GDP growth forecast for 2019 to between 0% and 1%, with growth expected to come in at around the mid-point of the forecast range – a steep drop from full-year GDP growth of 3.1% in 2018.
Latest data released Friday – just two days before the Prime Minister’s National Day Rally – saw Singapore’s key non-oil domestic exports (NODX) fall 11.2% y-o-y in July, improving from a revised drop of 17.4% y-o-y in June.
Enterprise Singapore on Aug 13, the same day MTI cut its GDP forecast, slashed forecasts for Singapore’s NODX to -9.0% to -8.0% for 2019.
This came after a third straight quarter of decline, with NODX contracting 14.6% y-o-y in 2Q19, due to decreased shipments of both electronic and non-electronic products.
This was a steeper drop from the 6.4% y-o-y decrease in the previous quarter, which had then triggered a revision of the NODX forecast down to -2.0% and 0.0% for the year.
While the July decline was less than the expected 14.8% contraction based on the median estimate from a Wall Street Journal poll of seven economists, the data showed just how much Singapore’s trade-dependent economy is suffering from the ongoing US-China trade war.
On Sunday, Lee stresses that the city state must stay independent in the conflict, and warns that Singapore’s economy would suffer if relations worsen between the US and China – its two biggest trading partners.
“We have our own history and culture, and also our own perspectives and political stands on current affairs,” Lee says. “We must always be principled in our approach, and not swayed by emotions.”
Meanwhile, Singapore, which celebrates its bicentennial anniversary this year, is turning its attention to a series of mega infrastructure projects as it looks into the future.
First, Lee says the island nation can expect to spend some $100 billion or more over the next 50 to 100 years to protect itself against rising sea levels brought about by climate change.
He says Singapore must treat its battle against rising sea levels “with utmost seriousness” – likening it to the Singapore Armed Forces (SAF), which protects the country’s sovereignty.
“Everything else must bend at the knee to safeguard the existence of our island nation,” Lee says, adding that both its armed forces and climate change defences are matters of "life and death".
The Prime Minister says national water agency PUB has plans to build a second pump house at the opposite end of the Marina Barrage, which currently pumps water out of Marina Reservoir into the sea when it rains heavily. Rain falling in the city area can then drain into Marina Reservoir, which prevents the city area – including Singapore’s financial centre – from flooding.
Along the eastern coastline, Lee says Singapore is also examining other alternatives, noting that while there are good engineering solutions to tackle the problem, “they will all cost money”.
To this end, he reveals that Singapore has looked at other low-lying countries for inspiration. The Netherlands, for instance, uses polders and dykes to keep the land dry.
Another alternative would be to reclaim a series of islands offshore – stretching from Marina East to Changi – which will be connected by barrages to create a freshwater reservoir.
Next, the Prime Minister reiterated plans to develop the Greater Southern Waterfront (GSW), which will see some 30km of Singapore’s southern coastline transformed into a new place to live, work and play.
Spanning 2,000ha –double the size of Punggol – the Greater Southern Waterfront district will stretch from the Gardens by the Bay East area to Pasir Panjang.
One of the first Greater Southern Waterfront developments will see some 9,000 public and private housing units built of the site of Keppel Club.
"Think of it as Punggol by the Bay," Lee says, adding that more commercial space will also be developed at the Greater Southern Waterfront.
As part of the Greater Southern Waterfront, Lee says Pulau Brani will also be redeveloped in tandem with Sentosa to host new attractions similar to Universal Studios on Sentosa.
Plans to relocate PSA International’s port terminal on Pulau Brani – which lies between Sentosa and the mainland – to the new Tuas port are already underway, with the move expected to be completed by 2027.
“Over two centuries, we have built and rebuilt generations of buildings. Today, we have started a new downtown in Marina Bay and created a distinctive city skyline,” Lee says.
“When PSA moves out of the city and Pasir Panjang terminals, these old spaces will once again be vacant, another blank slate. A new generation will have another opportunity to imagine and build part of their vision for Singapore.”