1)Singapore's economy is heavily reliant on exports. Manufacturing accounts for a quarter of the economy, "with the export-to-GDP ratio at more than 180%, compared with an Asia average of 60-70 percent"(See here for more details). As worldwide demand falls due to the recession, our exports will surely suffer a steep decline.
2)MNCs have a very strong presence in our economy. As such, retrenchment may come suddenly and swiftly, leaving no time for workers to prepare themselves. Such decisions are made by the top management, whose headquarters are often based overseas and where our local government cannot intervene. Unemployment can increase dramatically as such companies slash jobs in an effort to cut costs. Our local unions and the government does not wield any power over the MNCs after all. Today has an article on this.
3)One of the pillars of growth in the Singapore economy is the biotechnology sector.
From Wikipedia:
Singapore is aggressively promoting and developing its biotechnology industry. Hundred of millions of dollars were invested into the sector to build up infrastructure, fund research and development and to recruit top international scientists to Singapore. Leading drug makers, such as GlaxoSmithKline (GSK), Pfizer and Merck & Co, have set up plants in Singapore. On 8 June 2006, GSK announced that it is investing another S$300 million to build another plant to produce pediatric vaccines, its first such facility in Asia. Pharmaceuticals now account for more than 16% of the country's manufacturing production.
This pillar of economic growth is still in its nascent stage, with the government investing heavy amounts of capital in it. Yet, the biotechnology sector seems destined to be heavily battered by the recession. Biotechnology will thrive in a bull market, as people have excess cash to invest in R&D, taking on higher risks in the hope of raking in future gains. But in a bear market, I doubt if investors are willing to part with their ever-more precious money on a venture that may give nil returns if research proves unsuccessful. Biotechnology firms may thus face insufficient funding for further growth and may have to file for bankruptcy. In fact, U.S. companies are already lobbying Congress for more aid.
I'm not the only one with such views. See here, here and here, all of them articles by international newspapers.
And this grim outlook is not taking into account our very own subprime crisis in the making, as explained by Mr Wang.
(Interested parties looking for additional information on HDB may proceed to:
1.http://www.youtube.com/watch?v=GjbXNH0RRoA
2.http://www.youtube.com/watch?v=VlqFl3rMLdg
for Leong Sze Hian's more in depth analysis of the HDB pricing policies.)
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