Singapore PM Says Covid-19 Economic Impact May Cause Recession
Tue, April 20, 2021

Singapore PM Says Covid-19 Economic Impact May Cause Recession

The country’s Prime Minister Lee Hsien Loong said during his visit to Changi Airport that “it’s possible” that Singapore will enter a recession. “Definitely, our economy will take a hit,” he added. He also mentioned that China plays a big factor in the Singapore region / Photo by: Michał Józefaciuk via Wikimedia Commons

 

The economic impact of the Covid-19 outbreak in Singapore may cause a recession and has already exceeded the impact of the 2003 severe acute respiratory syndrome (SARS), reports Singapore news provider The Straits Times.

The country’s Prime Minister Lee Hsien Loong said during his visit to Changi Airport that “it’s possible” that Singapore will enter a recession. “Definitely, our economy will take a hit,” he added. He also mentioned that China plays a big factor in the Singapore region.

Their country was first hit by SARS in February 2003, when a woman had been infected while traveling abroad. She spread the virus to 238 people; 33 of them died because of the virus. SARS was eradicated five months after but PM Lee does not expect the Covid-19 to be eradicated that fast “this time.” Nevertheless, they are working to contain the coronavirus, which originated in Wuhan, China in December 2019. It was only recently that the World Health Organization (WHO) called it a disease: the coronavirus disease 2019 (Covid-19).

Singapore’s Effort to Contain Covid-19

The number of people affected by Covid-19 in Singapore has been increasing. So far, there are 58 confirmed cases with five local clusters. This makes Singapore the country with the third-highest number of confirmed cases outside China, which now has more than 64,000 cases and 1,383 deaths. Based on the data provided by real-time world statistics provider Worldometer, Japan has 253 cases, Singapore 58, Hong Kong 53, Thailand 33, South Korea 28, Malaysia 19, Taiwan 18, Germany 16, Vietnam 16, Australia 15, USA 15, France 11, Macao 10, UK 9, and UAE 7. Other countries not included in the list have 5 or less confirmed cases of Covid-19.

WHO has already advised the public to avoid close contact with people suffering from acute respiratory infections, practice frequent hand-washing particularly after direct contact with sick people or their environment, practice cough etiquette (cover sneezes and coughs, maintain distance, wash hands), improve standard infection prevention, and control practices in healthcare facilities and hospitals, especially in the emergency departments. The Singaporean government likewise distributed masks to over a million households, introduced government-run WhatsApp to provide its citizens with daily updates about the disease, and have evacuated their citizens from Wuhan on a specially arranged flight and put them on a 14-day incubation period.

The number of people affected by Covid-19 in Singapore has been increasing. So far, there are 58 confirmed cases with five local clusters / Photo by: Sengkang via Wikimedia Commons

 

Changi: Asia’s Most Connected Airport

The tourism industry took the hardest hit as tourist arrivals dropped between 25% and 30% this year, the Straits Times added. This is why the Prime Minister visited the airport and the workers there. They are on the frontlines of the Covid-19 fight. In 2018, there were 18.5 million international visitors in Singapore and 3.4 million of those tourists were from mainland China. International visitors spent a total of S$27.1 billion during that period. Despite the decline in tourist arrivals, crew and staff of the airport still have to be at their posts and keep the country open for business. PM Lee said that he wanted to make sure that the Changi staff is well and they are well-supported. Whenever there are issues, the airport staff are informed and the government does all they can to help them deal with the issues so they remain confident in doing their jobs.

Most of the airport cleaning staff, customs and immigration officers, cabbies, and baggage handlers reported how the virus has impacted the sector. Taxi driver V.A. Moorthy talked to PM Lee and said that his income declined by about 30% and they have to wait for about an hour before a passenger comes and avails of their service at the airport. “Everyone is suffering,” Moorthy said.

Being the most connected airport in Asia, Changi has also become the most vulnerable. Singapore’s task force on coronavirus Lawrence Wong said via BBC that they are now doing everything they can so they can contain the spread of Covid-19. These days, travelers in Changi are checked for cough, cold, and fever symptoms. Singapore is also at risk of spreading Covid-19 because it is a top destination for international travelers and business meetings. Meanwhile, it has barred all arrivals from mainland China to lessen the risk of further disease outbreak.

Being the most connected airport in Asia, Changi has become the most vulnerable. Singapore’s task force on coronavirus Lawrence Wong said via BBC that they are now doing everything they can so they can contain the spread of Covid-19 / Photo by: Pulkitsangal via Wikimedia Commons

 

Economic Links Between China and Singapore

China and Singapore have close economic links. Singapore is usually at the top of the list of Chinese companies wanting to expand internationally. German database company Statista details the top Chinese tech brands among consumers in Singapore as of 2019 as follows: Alibaba (50%), Huawei (49%), Xiaomi (47%), Lenovo (45%), and OPPO (44%). Singapore’s trust in Chinese tech brands in 2019 increased by 11% compared to its 2017 record.

Singapore has been enjoying continuous GDP growth every year. It was in 1985 when it experienced its first post-independence recession caused by both internal and external factors. The government beat the recession by introducing cost-cutting measures, like rebates on the property, corporate, and personal taxes, providing loans with low-interest rates, and reducing employer contributions to their Central Provident Fund and Skills Development Fund. After all efforts, the economy recovered mid-1986. The country’s Defence Minister Ng Eng Hen also said that they will be working with unions and firms to minimize any retrenchments related to the disease.

If the recession happens, there will be a significant decline in the country’s economic activity and businesses and consumers will be spending less money. Economists have defined recession as a decline in the gross domestic product in two consecutive quarters. Recession causes unemployment too as companies cut back on hiring new workers or may lay off workers to cut costs. This is the ripple effect on the economy. When there are no new jobs produced in a country and there are layoffs, consumers will also spend less or save money. This means less money in the economy, according to the financial platform Investopedia.

Singapore is a well-connected and small country. There is a need to be extra vigilant to win the fight against Covid-19. In so doing, it will also lessen the impact of the outbreak on its economy.