The gods of fortune are smiling on Singapore

FEB 14 — Chinese New Year has arrived, marking almost a year of the Covid-19 pandemic.

Chinese New Year 2020 marked the last time I was able to cross the border to Malaysia; after that, the causeway effectively closed for the first time in its history.

While cargo does still move across the Singapore-Malaysia border, people for the most part do not.

The umbilical link between Singapore and Malaysia severed and of course, all other international travel is also more or less off the table.

Basically, the Year of the Rat brought unprecedented disruption so it was actually a relief to see it off and welcome the ox.

The festivities this year are muted in Singapore: no lion dances, no fireworks, no parades and reunion dinners were restricted to eight people.

But despite all that, there is optimism in the air. Globally we can see vaccines appear to be working.

The infection and death rates for Covid-19 in many countries are falling as a result of vaccines, lockdown measures and perhaps a certain degree of herd immunity.

There finally appears to be light at the end of the pandemic tunnel.

Yun Yang Dragon And Lion Dance Association, usually hired to do caiqing at about 100 places a year, received fewer than 10 bookings this year. — TODAY file pic
Yun Yang Dragon And Lion Dance Association, usually hired to do caiqing at about 100 places a year, received fewer than 10 bookings this year. — TODAY file pic

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But what will the gradual end to the pandemic mean for most Singaporeans? Other than an eventual return to travel, night life and larger social gatherings the end of Covid-19 will mean a return to economic growth.

Singapore’s economy contracted by around six per cent in 2020. While this marks the sharpest economic contraction in the nation’s history, in reality enormous spending by the government by way for relief packages and support for individuals and businesses mean that much of the population has been cushioned from the full economic impact of the pandemic.

Singapore is one of the more trade dependent economies in the world and the slowdown in global growth and trade as a result of Covid-19 could have had a crippling effect on the local economy but the government spent almost S$100 billion (RM305 billion) on Covid-19 relief measures and this has kept businesses afloat and even growing.

These stimulus measures meant that unemployment in Singapore barely rose over the past year — and in fact firms appear to be hiring aggressively once again with just four per cent of the population unemployed.

Meanwhile as the government has been spending to prop up the economy, private investment has also been flowing into the country.

Foreign investment into Singapore reached S$20 billion in 2020 — one of the highest figures in history and an extraordinary sum given the pandemic.

Regardless of trade disruptions and restrictions, large investments continue to be made in Singapore’s economy.

Aside from investments in facilities and infrastructure, private wealth is also flowing into the country. Last week, it was announced that Sergei Brin, the co-founder of Google and one of the 10 richest people in the world, would establish a family office in Singapore.

Brin will effectively move a portion of his wealth to Singapore and a team based here will manage these funds.

The Google billionaire is just one of many extremely wealthy individuals using Singapore as a base for their money.

In the last few years, Singapore has begun to rival Switzerland as a centre for private wealth with trillions of dollars of private wealth deposited and based here on behalf of wealthy individuals and families from around the world.

And Covid-19 has only accelerated the flow of private wealth to our shores as the wealthy look for safe havens amidst disease and disruption.

And as private wealth flows into Singapore, we should also keep in mind that the Singapore government’s funds also remain considerable.

Even with draw downs from our reserves to support the economy during the pandemic, the nation’s sovereign wealth funds are invested in global markets — in New York and Hong Kong.

As these markets have reached new highs in recent months, it is likely Singapore’s wealth has increased further.

The bottomline is Singapore is perhaps the only major financial centre in the world that is effectively Covid-free. And businesses and individuals are extremely confident of the nation’s resilience.

And so, the stage is set for a dramatic economic recovery and the accumulation of greater wealth than ever before.

Of course in our hunt for prosperity, there are many challenges we must tackle --inequality, rising prices, managing local expectations and talent — so in this new year, I wish us all luck.

*This is the personal opinion of the columnist.

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