Hope in strong basics

http://www.channelnewsasia.com/stori...380387/1/.html

Tharman says global economic crunch could impact job market

By Dominique Loh, Channel NewsAsia | Posted: 05 October 2008 1723 hrs


SINGAPORE: Finance Minister Tharman Shanmugaratnam said on Sunday that the global economic crunch could impact Singapore's job market, but he is confident that the country has the right fundamentals to sail through the rough patch.

Even as American lawmakers gave their approval for the US$700 billion bailout programme to save the country's financial institutions, Mr Tharman said US needs to do more to solve the lingering crisis.

After visiting the Toa Payoh East neighbourhood on Sunday, the finance minister sat down for a discussion about the global economic crisis with residents.

He said: "Our confidence in Singapore is very high. Across the board, manufacturing, services, people are confident about Singapore. Our property market is not as overvalued as many other countries, including some others in Asia.

"We have a strong fiscal system. It's just as well we didn't spend all our surplus last year. We were conservative. We preserved some for the future and that's the right approach."

Residents were also concerned about the failure of US banks, insurance companies and money matters - big and small. They questioned the integrity of Singapore's banking system and insurance companies' ability to honour their obligations.

Mr Tharman said: "I can assure you that our Singapore banks are well regulated and there is no risk and no reason whatsoever to have a run on our banks. More importantly, the banks themselves have good risk management.

"So frankly, you need not worry about how solid our banks are, your money is safe. We are not in the same situation as the US, we need not panic.

"Our regulations are stricter compared to Ireland, the United States, in fact compared to many developed countries. We have always been old-fashioned in our regulatory approach."

The minister added that Singaporeans can have the same confidence in insurance companies, which also have to abide by strict regulations.

As for Singapore's full-year economic growth forecast, Mr Tharman said the Trade and Industry Ministry will reveal the numbers on October 10. Singapore's monetary policy update would also be out by then.


- CNA/so

http://www.straitstimes.com/Breaking...ry_286280.html

Oct 5, 2008

Hope in strong basics

By Li Xueying


HEAVILY exposed to the global economy, Singapore will see an economic slowdown that will last not just one or two quarters, but 'several quarters', said Finance Minister Tharman Shanmugaratnam on Sunday.

In tandem, unemployment is expected to increase.

But he also sounded a note of optimism, saying with its strong fundamentals, Singapore will ride out the crisis - and emerge better than most countries.

Mr Tharman was addressing some 300 grassroots leaders and residents of Toa Payoh East, after a three-hour walkabout which saw him, among other things, opening an exercise corner for the elderly.

Accompanied by MPs from the Bishan-Toa Payoh GRC including Toa Payoh East MP Josephine Teo, it was his first ministerial walkabout since taking charge of the finance portfolio this year.

During the 80-minute dialogue that followed, residents asked 13 questions ranging from foreign talent to greater rewards for grandparent caregivers.

But the focus was on the darkening economic outlook amid increasingly gloomy news from the United States - and the world - on what some have termed 'the worst financial crisis since the 1930s'.

So grassroot leader Raymond Teo, 39, wanted Mr Tharman's opinion of the US$700 billion (S$1 trillion) package to bail out the US troubled financial institutions, and how it impacts Singapore.

The minister expressed relief the US Congress had supported the package as it is a step forward.

But it is 'not a full solution' in addressing the real malaise - shortage of capital in the banks, he noted. This, the new US President would have to work out when he takes over in Jan.

And because the problems are 'deep and extensive', it will take 'a year or two' before the world emerges from the crisis, he later told reporters.

Meanwhile, the crisis has moved into what he calls 'its second phase'.

'It's no longer just a financial crisis,' he said. 'It is now an economic crisis.'

Read the full story in Monday's edition of The Straits Times.

http://www.businesstimes.com.sg/sub/...99833,00.html?

Published October 6, 2008

Slowdown to last several quarters

But strong fiscal position, diversity will help Singapore weather economic crisis: Tharman

By JAMIE LEE


(SINGAPORE) Singapore's economy is expected to slow for 'several quarters' as the sub-prime meltdown has evolved into phase two - an economic crisis, said Finance Minister Tharman Shanmugaratnam.

With Singapore's heavy exposure to the global economy, the country is unlikely to be spared from the expected slowdown across the world, said Mr Tharman, who was speaking to Toa Payoh East residents during a dialogue session yesterday.

'We are now entering the second phase of the crisis,' Mr Tharman told the residents.

'It is no longer just a financial crisis. It is now an economic crisis,' he added, pointing to slowing growth in the US, Europe, Japan, India and China.

'We will also see a slowdown, from all indications, that will last not just one or two quarters, but may last several quarters because we are heavily exposed to the global economy.'

But he expects the country to ride through the crisis with its strong fiscal position and a diversified economy.

'The government is in a strong fiscal position,' he said. 'Frankly, it's just as well that we decided not to spend all of the surplus that we earned last year. We spent some of it, provided some support for households, but we kept some dry powder.'

He said that some sectors, such as the shipping industry and the high value-add manufacturing businesses, continue to thrive despite the crisis. And while the financial sector is expected to slow down, some segments, including private banking and wealth management, continue to show strong growth.

The minister added that although job creation will be affected in the next few quarters, Singapore's starting level of unemployment is much lower those that of other countries.

He noted that the approved US bailout package was just the beginning of work needed to get the American economy back on track.

'Globally, we were relieved that the US Congress came to a decision to support the package because it helps (to) take us forward,' he said. 'The consensus is that more will have to be done.'

Responding to queries on the recent 21 per cent jump in electricity tariffs, Mr Tharman said that next year's utility rebates would factor in this price hike - the sharpest in eight years. 'We know the large increase in the fourth quarter has unsettled many people. We'll take that into consideration in next year's budget.'

The minister said that the increase had been reasonable compared to the estimated 45 per cent spike in oil prices over the last one year. 'Let the realistic price be charged, based on the world market price. But, help our poor people. Those who are wealthier have to pay the world market price.'

Mr Tharman added that that there was a good chance that tariffs could go down if current fuel prices continue stabilising.

When asked if banks could be pushed by the Monetary Authority of Singapore (MAS) to disclose their exact exposure to failed structured products linked to bankrupt Lehman Brothers, Mr Tharman told reporters that there needs to be a balanced use of regulation.

'We've got to avoid swinging in pendulum-like fashion when it comes to regulation,' he said.

He declined to say if there would be further economic growth revision or if the MAS would ease the Sing dollar policy - a consensus forecast by most economists.

http://www.straitstimes.com/Prime+Ne...sunwMethod=GET

October 6, 2008 Monday

Economy may slow for 'several quarters'

But strong fundamentals will see Singapore past global crisis: Tharman

By Li Xueying, Political Correspondent


HEAVILY exposed to the global economy, Singapore will see an economic slowdown that could last 'several quarters', not just one or two quarters, said Finance Minister Tharman Shanmugaratnam yesterday.

In tandem, unemployment is expected to increase.

But he also sounded a note of optimism, saying with its strong fundamentals, Singapore will ride out the crisis - and emerge better than most countries.

Mr Tharman was addressing some 300 grassroots leaders and residents of Toa Payoh East, after a three-hour walkabout which saw him, among other things, opening an exercise corner for the elderly.

Accompanied by MPs from the Bishan-Toa Payoh GRC, including Mrs Josephine Teo, it was his first ministerial walkabout since taking charge of the finance portfolio this year.

During the 80-minute dialogue that followed, residents asked 13 questions covering topics from foreign talent to greater rewards for grandparent caregivers.

But the focus was on the darkening economic outlook amid increasingly gloomy news from the United States - and the world - on what some have termed 'the worst financial crisis since the 1930s'.

So grassroots leader Raymond Teo, 39, wanted Mr Tharman's opinion of the US$700 billion (S$1 trillion) package to bail out troubled financial institutions in the US, and how it impacts Singapore.

The minister expressed relief that the US Congress had supported the package, as it is a step forward.

But it is 'not a full solution' in addressing the real malaise: shortage of capital in the banks, he noted. This, the new US President would have to work out when he takes over in January.

And because the problems are 'deep and extensive', it will take 'a year or two' before the world emerges from the crisis, he later told reporters.

Meanwhile, the crisis has moved into what he calls 'its second phase'.

'It's no longer just a financial crisis,' he said. 'It is now an economic crisis.'

Growth is slowing in the US, Europe, Japan, and even China and India, he noted. 'So globally the economy is slowing down. This is a fact we cannot escape.'

Thus, Singapore 'will see an economic slowdown which, from all indications, will last not just one or two quarters, but may last several quarters, because we're heavily exposed to the global economy'.

But he stressed that Singapore is armed with strengths that will see it safely through the crisis.

First, the unemployment rate is low.

So while fewer jobs will be created in the next few quarters, the starting level is 'much lower' than most countries.

Second, Singapore has a diversified economy.

'Some sectors are still doing well,' he said, citing marine engineering, construction and manufacturers of high-value products. Even in the embattled financial services industry, wealth management and private banking are doing well.

Third, the Government is in a strong fiscal position, 'and we'll be able to take the necessary actions if the situation turns much worse'.

He said: 'Frankly, it was just as well we decided not to spend all the surplus that we earned last year.' Part of it was given to Singaporeans as Growth Dividends.

'This crisis shows the merits of thinking not just short-term but medium- to long-term,' the minister added.

Exuding confidence about the country's strong fundamentals, he told Singaporeans to keep their eye on the medium- to long-term future, as the short-term problems can be dealt with.

'If we keep our focus on education, continuous training, and attracting new investments and new industries here - which is what we're doing - Singapore will continue to do well.

'So we'll ride through the down cycle ...I feel we're going to come through it better than most countries - not just in the region but even most developed countries.'

Asked for the full-year economic growth forecast, he said the Trade and Industry Ministry will reveal the numbers on Friday. Trade and Industry Minister Lim Hng Kiang had warned growth might dip 'a bit below' 4 per cent this year.

One resident, technician Ali Khan, 43, said he was assured by Mr Tharman's replies, as he and his friends had been worried about their job security.

'It gives me some confidence that despite the downturn, we'll be all right in the long run.'

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