Singapore ranks 7th in the world

Singapore ranks 7th in the world

Republic scores well in business and education, but fares poorly as cultural capital

By K.C. Vijayan

SINGAPORE has been ranked as one of the best global cities in the world in a study by the influential Washington-based magazine, Foreign Policy.
The country was ranked seventh in an index of the top 60 global cities, defined as cities that radiate influence, wealth and sophistication.

It was hailed as a place to get a degree and do business, but fared poorly as a cultural capital.

The cities that finished ahead of Singapore were New York, London, Paris, Tokyo, Hong Kong and Los Angeles - in that order. But the Republic placed higher than other powerhouses such as Chicago (No. 8), Beijing (No. 12) and Frankfurt (No. 21).

The cities were ranked based on five factors: business activity levels; human capital - the ability to draw diverse groups of people and talent as well as the number of international schools and degree holders it has; cultural experience; information exchange; and political engagement.

The last two categories measure news and data distribution through various means and the degree to which a city influences global policy-making and dialogue, respectively.

On business, Singapore was cited for the large number of top-40 global service firms with offices in the country and the volume of goods that passed through here, among others.

On the list of top cities to get a degree, Singapore finished behind New York and London, but ahead of places like Boston, Los Angeles and Paris.

When it came to cultural buzz however, 36 cities, including Seoul, Shanghai and Tel Aviv, finished ahead of Singapore.

The culture rankings are based on the number of major sporting events held, culinary offerings, international travellers, museums and performing arts.

Assistant Professor Michael Netzley of the Lee Kong Chian School of Business at the Singapore Management University said he was ‘not surprised’ by Singapore’s rankings.

‘The question is, does Singapore want to be a cultural capital, given that it is already doing great overall without this, based on its business and human capital?’

When contacted for a response, the Singapore Tourism Board’s director of communications Rostam Umar said: ‘Many of the cities topping the Cultural Exchange listing are well-established centres of commerce that have a long history and have, over the years, developed organically into cultural hubs as well.

‘Compared to these cities, Singapore is relatively young.’

He added: ‘However, we believe that Singapore is on track to improve its ranking in this area with the entire city gearing up as a place for all to live, work and play.’ He cited the increasing number of leisure and lifestyle events being held here in recent years as an example of this.

The Global Cities Index, the first done by the magazine, aimed to measure ‘cultural, social and policy indicators’, not just ‘economic or financial ties’, it said.

It said the top global cities were continuously adapting to changing conditions.

‘London may be the city hardest hit by the global credit crunch, but chances are that it will leverage its abundant global financial ties to bounce back. Singapore, San Francisco and Mexico City will no doubt be taking notes,’ it added.

Foreign Policy, co-founded by noted American political scientist Samuel Huntington in 1970, is published by the Slate Group, a division of Washingtonpost.Newsweek Interactive.

FOCUS ON STRENGTHS
‘The question is, does Singapore want to be a cultural capital, given that it is already doing great overall without this, based on its business and human capital?’

Assistant Professor Michael Netzley of the Lee Kong Chian School of Business at the Singapore Management University

Source : Straits Times - 29 Oct 2008

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Singapore Unemployment likely to rise

Singapore Unemployment likely to rise

By Fiona Chan

JOB losses are looming as Singapore’s economy slows, with manufacturing and financial services companies expected to be among the first to cut staff.
This means unemployment is likely to rise over the next few quarters, while salaries will grow at a much slower pace, said the Monetary Authority of Singapore (MAS) in its latest half-yearly Macroeconomic Review, released yesterday.

The jobless rate for the third quarter is due out this Friday, and is expected to be higher than the 2.3 per cent seen in the second quarter.

Last week, Trade and Industry Minister Lim Hng Kiang warned that unemployment for the whole year is likely to come in higher than last year’s 2.1 per cent given the effects of the global financial turmoil.

Economists are tipping that the jobless rate will reach 3 per cent by year end or early next year, and rise to close to 4 per cent towards the end of next year - a level not seen since the Sars period in 2003.

Although businesses are ‘not planning to drastically reduce head count at the moment’, the MAS said employers are turning cautious about hiring given the more uncertain outlook next year.

It cited the most recent Manpower Employment Outlook Survey, which showed that only a quarter of the 629 firms surveyed here plan to increase their head count in the fourth quarter.

The rest mostly expected no change, although some are still uncertain and 10 per cent will cut jobs.

Wages will also come under pressure. They are expected to grow about 5 per cent this year but rise only 2 per cent next year, said the MAS.

Already, salary hikes have declined sharply. Nominal wages climbed 11 per cent in the first quarter over the previous year, boosted by a round of civil service bonuses, but then rose only 3.1 per cent in the second quarter, partly because of a high base the year before.

‘The outlook is generally bearish,’ said OCBC economist Selena Ling.

‘As the global downturn continues to prick strongly on people’s minds, employers are going to be cutting back.’

Even pump-priming by the Government - which refers to state spending to stimulate the economy - is likely to be in infrastructure, which ‘may not fully translate into local job gains’.

But Ms Ling added that unemployment last year - which fell to 1.7 per cent in the second half of the year - was an ‘unbelievable’ rate.

‘A more normal rate is probably about 3 per cent, but that means the resident unemployment rate, excluding foreigners, will be higher than that,’ she said.

The jobless rate, calculated by dividing the number of unemployed people by the total workforce, is also rising partly because more fresh graduates are entering the job market, said Citigroup economist Kit Wei Zheng.

He expects unemployment to average 2.6 per cent this year and continue edging up next year to hit 3.6 per cent.

Within manufacturing, the MAS believes hiring in petrochemicals and transport engineering ’should hold up relatively well’, but electronics jobs will take a hit due partly to softening global demand for IT products.

The global financial crisis and bank consolidations will also translate into job cuts in the financial services industry here, where many multinational corporations have set up home. ‘Several major foreign financial institutions have already announced retrenchments worldwide, which could lead to some job losses in their local offices,’ said the MAS.

Even construction, which is still growing at a fairly healthy pace, is likely to see fewer jobs created as a shortage of labour and material leads to project delays, the MAS added.

OCBC’s Ms Ling also expects business services such as commercial leasing and conveyancing to be hit, as they are ‘very tied to the property boom’, which is now over.

But selected industries such as hospitality and health care still have thousands of job vacancies that need to be filled, said the MAS.

The integrated resorts and related firms alone will generate about 60,000 jobs over the next few years, while 7,000 jobs are expected to be created in health care over the next five years.

Source : Straits Times - 29 Oct 2008

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Economy to stay weak next year

Economy to stay weak next year

Economists predict almost no growth, moderate recovery in second half

By Robin Chan

SINGAPORE’S slowing economy is likely to remain weak next year as the full impact of the financial crisis hits home, said the Monetary Authority of Singapore (MAS) yesterday.
The economy, already in a technical recession, will see ‘further slippage… ahead’ with the decline expected to spread to almost all sectors, from manufacturing to tourism.

The MAS in its second half-yearly macroeconomic review said that expansion is tipped to be ‘below its potential rate’ of 4 to 6 per cent next year.

The official growth forecast for this year has already been scaled down to about 3 per cent, while last week, Senior Minister Goh Chok Tong said that growth in 2009 could be below this year’s projection.

Economists The Straits Times talked to predict practically no growth next year. Most expect expansion of between 0 and 1.5 per cent with a moderate recovery in the second half of next year.

Citigroup’s Kit Wei Zheng, one of the more bearish economists with a tip that growth next year will be minus 1.2 per cent, said that ‘a recovery in the second half of next year should not be taken for granted. Any recovery will be gradual and will not take the V-shape of past recessions.’

MAS said that ultimately a recovery will be ‘predicated on the performance of the G-3 - the United States, Europe and Japan - and regional economies’.

The ripples from the financial tsunami are reaching virtually all important sectors. The report said Singapore’s economy has ‘entered a more advanced stage of weakness’.

Manufacturing and tourism have yet to feel the full force of the crisis but will eventually be hit as firms and consumers cut back on spending, in not only the G-3 economies, but across the region.

Electronics, which makes up 30 per cent of manufacturing, will continue its slide as firms scale down IT spending and defer outlays on tech upgrades.

The usually buoyant holiday season will offer scant relief for exporters since tech sales are likely to be lacklustre with consumers in major markets tightening their belts.

China, which analysts expect to grow at 7 to 8 per cent, is unlikely to give Singapore a boost because its recent contribution to export growth has been relatively small, said the MAS.

Tourism, with visitor arrivals in their third straight month of decline, is likely to be hit further as travellers from the region forgo holidays here.

The crisis has battered consumer sentiment and affected the financial services sector, property and real estate services, and shop and restaurant owners.

Cautious investors are choosing to put their money in safe assets or hoard cash, weakening the local wealth management industry. Asian hedge funds have also been hit by redemptions, forcing them to offload assets.

But the MAS believes that the domestic fund management industry has ‘underlying strength with the ongoing structural wealth generation in Asia’.

Household wealth has been affected by falling asset prices so retail sales will be hit as consumers cut back spending. This will mean retailers could see slower business towards Christmas and into 2009, said the MAS.

One spot of relief is that the pharmaceuticals sector may offer some moderate cushion next year when two new facilities - belonging to Abbott and Novartis - are expected to open.

The drug-making industry largely operates on its own supply cycle, but has generally been weak this year due to a delay in new drug approvals from the US and competition from generic medicines.

The industry is also notoriously volatile. Last month’s manufacturing figures were boosted by a surprising rebound in pharmaceutical output.

Another sector bucking the trend is construction, which will likely ride out 2009 well as backlogged projects awarded from previous quarters get under way, MAS said. Large-scale private sector projects like the integrated resorts and the Marina Bay financial centre will also keep the industry busy through 2010.

However, construction’s share of GDP is small so any contribution to overall growth will be limited.

Source : Straits Times - 29 Oct 2008

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