Singapore Economic Reactions in Times of Need
A survey performed during the SARS period showed that the jobless rate increased more than 5.5%. The highest for the last decade in Singapore (Ministry of Manpower, 2003). In absolute numbers, overall employment diminished by 25,963 in the second quarter of2003. The largest quarterly decline since the mid-1980s recession. Unlike previous retrenchment that affected mainly blue-collar labour. SARS also affected white-collar employees. In terms of expenditure, the government incurred SGD192 million in direct operating expenditure and spent SGD105 million as development expenditure on hospitals for additional isolation rooms and medical facilities to treat SARS.
There is also corresponding expenditure increase in investment on research and development. The implementation of workplace SARS control measures added to operational and administrative costs. For example, the policy of temperature taking was implementing at workplaces in the private sector. Numerous private establishments installed thermal-scanners at their entrances as such precautionary measures were necessary to contain the disease. This helped to restore business confidence and investment potential.
The Economist (2013) suggested for the focus of public investment is on new infrastructure as well as the maintenance of existing infrastructure. Since this boosts economic capacity in the long-term and bolster spending in the short-term. The GFC was a good opportunity to exercise this option where the Singapore government brought forward expenditure on infrastructure maintenance on public housing upgrading and defence spending. Planned constructions were brought forward to increase the pace of recovery. For example, the building up of the Marina Bay area which houses the Marina Bay Financial Centre. And the Marina Bay Sands Integrated Resorts and the Mass Rapid Transit (MRT) downtown line.
The above three sub-sections discussed the policy measures to extreme events for an island nation. However, a critical social aspect is the linkage between human and crisis. Hobson et al. (2014) associated human security and natural disasters by identifying a collective basis where an individual is the primary referent of security. Human security holds the view that the security of people is vital for national, regional and global stability. It is a freedom from want, fear and food security. According to the United Nations Development Program (UNDP), human security promotes a bottom-up, people centered approach, which emphasizes the needs, capacities and experiences of individuals on the
ground. This is especially critical in the case of Singapore where the well-being of individuals should be at the center of consideration for policy making. For human beings are the only natural resources on the island nation.
Review and Conclusion
Pristine forests and mountains, sandy white beaches, alluring atolls, crystal blue waters and knee deep water for as far as your eyes can take you. These are the attractions of island nations. However, beyond these natural luxuries lie the harsh realities of water crisis, poverty, health pandemic, financial crisis and economic challenges similar to what most nations face. Singapore has a respectable level of current account surpluses, strong FDI, a well-regulated banking system, good fiscal health and vast foreign exchange reserves.
Nevertheless, no country is spare from being impacted directly or indirectly by extreme events — Singapore is no exception. Singapore is vulnerable to both natural and man-made extreme events alongside its remarkable economic growth. We have witnessed Singapore’s all-hazard management framework with specific references to the SARS epidemic and a macro prudential approach to the GFC. In fighting SARS, Singapore’s health authority was responsive to swing into action when they realized that the existing bureaucratic structure was inadequate in terms of facilitating close cooperation between various key government agencies to tackle the health crisis on hand.
To address the potential job losses and fall in national income from GFC. The Singapore government used its cash reserves to address supply side competiveness. This provided assurance for continued FDI as well as strong recovery of a trade dependent economy. The multi-cooperation of different government agencies is a prerequisite for an effective rollout of the policy initiatives. Singapore’s experiences with SARS and GFC strongly suggest that risk mitigating measures can be effective only when a range of partner’s and stakeholders (such as government ministries, non-profit organizations and grass-roots communities) become adequately involved.
Future research is requiring determining if any of these aspects are transferrable to other island nations. Singapore’s response to the outbreak of SARS and GFC offers valuable insights in the types of policy responses required to combat future epidemics in Southeast Asia. Both SARS and GFC are extreme events. The SARS is a health crisis and the GFC an economic crisis. Their differences are highlighted in the recovery time the magnitude of the impacts and the preventive and responsive measures in place.
The recovery time varied and the magnitude of the impact differ depending on the nature of the extreme event. There were sound preventive measures for SARS but reactive measures were need as the virus was a new strain. Measures were reactive for GFC as preventive measures in place were not adhered to by the regulators. A crisis should be cherishing as it permits a decision-maker to take transformative action with maximum support and minimal objection. Blanchard (2005) sums it up appropriately. In every crisis, something takes prominence that you hadn’t thought was necessarily going to be critical. In the case of Singapore, it has been the strength of the bureaucratic efficiency to stand united for a common cause.
Although bureaucratic efficiency was in place, the island nation remains vulnerable to external shocks than is currently acknowledged. The world is actually safer in this present day than we have ever been before (Wildavsky, 1988). Extreme events are worsening but the capacity to deal with them is building. Put another way, crises and disasters are boundary-less (crosses boundaries) and time-less (deep effects felt many years down the timeline), owners-less (no one single entity owns it hence, no single organization or country is responsible) and origin-less (cause of SARS were ill understood) (Boin, 2009).
This all supports previous findings that island nations remain vulnerable to extreme events. There is no textbook response but random solutions on the go as risks and uncertainties abound. For that reason, the crucial task is to communicate clearly and explain what is happening plus the actions to manage extreme events as they unfold.
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