Singapore fights post COVID-19 crisis with eyes on Hong Kong

By Noel Caballero

Bangkok, Jul 7 (efe-epa).- Singapore will to head to polls on Friday amid the forecast of its first recession in the last two decades, while it seeks to leverage the instability in Hong Kong to become the financial capital of Asia.

With the aim of providing a greater stronghold to the next government, in terms of working toward the recovery of the economy following the impact of COVID-19, Prime Minister Lee Hsien Loong’s government on June 23 announced early elections which were earlier anticipated sometime before April 2021.

According to the latest official data, the economy of the city this year will suffer a GDP contraction somewhere between 4 and 7 percent.

The political stability of the city-state, the People’s Action Party is in power since its independence in 1965, and are favorites to win in the coming general elections as well, is one of the strong points of this country – with its 5.7 million habitants – that accommodates more than 1,500 financial and insurance institutions.

Singapore economic growth has been unstoppable in the last few decades and has allowed it to transform into a luxurious and modern multi-cultural metropolis where its skyscrapers proliferate banks and offices of financial entities from across the world.

During the Sunday’s speech, Prime Minister Lee Hsien Loong, who is seeking reelection in the general elections, said that it was important for Singapore to maintain a good reputation and confidence of the global investors to fight the economic crisis due to the pandemic.

“Being so open and trade-dependent, it is (expected to be) the first to enter a recession, but the first to emerge,” OANDA’s senior market analyst for Asia Pacific Jeffrey Halley said.

However, The Economist Intelligence Unit’s Liuqing Yu believes that Singapore will face medium and long-term challenges such as a possible, “wave of unemployment,” when the governmental subsidies end, “plummeted trade activities,” or its role as “regional headquarters,” if the work from home norm is extended into general practice.

Economics professor at INSEAD business school Antonio Fatas told EFE that the global economic crisis and recession, “should not affect their ambitions to develop further their financial system.”