What with the PM promising goodies in the Febuary Budget; the news that the supply S’pore citizenships and PRs was halved ; measures meant cool property prices and more to come if necessary; and with the “removal” of comrade Mah from the PAP politburo, it would seem that a general election is on the cards soon, possibly as soon as March.
But there could be an economic problem brewing, if the worse fears of a Bank of America Merrill Lynch analyst materialise, that could derail any plans for a March GE.
Last week, it was announced that Singapore’s key non-oil domestic exports (NODX) in November had its biggest monthly fall in eight years. The NODX fell 12.9% month-on-month in November, the largest monthly drop since December 2002. Blame it on pharmaceutical exports which are always very volatile.
So analysts are pretty relaxed except for one who has concerns.
A Bank of America Merrill Lynch economist noted that even if pharmaceutical export is removed,”the NODX’s slowdown in November contrasts with the robust export performances of South Korea (+24.6 per cent vs +27.6 per cent in October), Taiwan (+21.8 per cent vs +21.9 per cent in October) and China (+34.9 per cent vs +22.9 per cent in October).”
He raised the possibility of Singapore exports facing structural problems such as the “stronger Singapore dollar and stricter foreign labour policy”, but he said more indicators are needed to confirm it.
My guess is that if the December or January NODX numbers do not show a recovery from November’s numbers, the election will be further delayed. Remember the latest possible date is in early 2012.
A parting Parthian shot: If the economic master plan that one LSL came up with in the 1980s had worked out as the spin says it did, we would not have this problem of a volatile pharma sector. The plan’s big idea was to diversify away from electronics, a very volatile industry. We did: into pharma, an even more volatile industry. sigh.
And in the early noughties his latest master plan again planned to further diversify away from the volatile industries and guess what? The chosen sector was tourism, with, as we later found out, casinos to draw the tourists. Err Las Vegas shows that recessions affect gambling and tourist revenues
Some may conclude he is incompetent, but all I’m concluding is that these show hard it is to “plan” economic prosperity for an open economy like S’pore. Might as well not bother. It also shows how difficult it is to take credit for economic prosperity. Sumeone will always be pointing out inconvenient facts.