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Chitchat Sinkieland's worst recessions in the last 51 years

Rogue Trader

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The worst periods in Singapore’s economy in the past 51 years
3 Oct 2016

By John Foo

Singapore’s economic growth is losing steam, experts say.

It is worrying, although the Singapore economy has overcome many challenges and experienced rapid development since independence in 1965.

In 1965, Singapore’s nominal gross domestic product (GDP) – one of the primary indicators used to gauge the health of the economy – per capita was around US$500, which put the country at the same level as Mexico or South Africa.

tumblr_inline_oegdperag41t3kw0f_500.jpg


Last year (2015), GDP per capita was about US$56,000 – putting us in the same league as Germany and the United States.

According to the Monetary Authority of Singapore (MAS)
– the Republic’s central bank and financial regulatory body – Singapore’s strong economic performance over the years “reflects the success of its open and outward-oriented development strategy”.

Over the years, the composition of Singapore’s exports has evolved from labour-intensive to high value-added products such as electronics, chemicals and biomedical, added the agency.

It has also helped with the country’s performance: over the period from 2000 to 2010, GDP nearly doubled, rising from S$163 billion to S$304 billion.

But there was gloom amid the boom in between. Given that Singapore’s economy is driven by exports, it can be hard hit by the global economic slowdown.

And it has.

For example, Singapore experienced its first recession in 1985. After that, it faced the 1997 Asian Economic Crisis, the 2001 recession (where the economy shrunk by 2 per cent that year) and the Global Financial Crisis of 2008-2009.

What happened in 1985?


In 1985, the Singapore economy went into recession. Interestingly, it was also the only time when the domestic economy contracted while the global economy was still growing.

Prior to the decline, Singapore had been enjoying GDP growth of 8.5 per cent per year.

In a speech at the Singapore Economic Review Conference last year, MAS managing director Ravi Menon said the 1985 recession “exposed structural strains in the economy, which had hitherto been masked by strong economic growth”.

By the second quarter of 1985, Singapore had posted a growth rate of -1.4 percent, which dropped to -3.5 per cent in the third quarter.

Companies went bankrupt and workers were retrenched. Eventually, Singapore’s unemployment figure rose to a high of 4.1 per cent in June 1985. The figure was only 2.9 per cent in the previous four years.

Menon added: “The 1985 recession was a significant milestone in Singapore’s development history. It led to a fundamental review of the policies and strategies that prevailed at the time.”

The most important outcomes from that period of review, which continued into the 1990s, were the structural reforms to enhance wage flexibility in the labour market; tap more decisively into regional markets for trade and outward investment; step up the pace of industrial upgrading while promoting innovation, entrepreneurship in the economy; and liberalise various services sectors such as finance, telecommunications, and utilities, added Mr Menon.

The economy recovered in mid-1986. By the second quarter of that year, Singapore posted a growth of 1.2 per cent, which increased to 3.8 per cent in the third quarter.

What caused the 1997 financial crisis?


The Asian financial crisis started with the collapse of the Thai baht in July 1997.

It escalated quickly, eventually causing a number of Asian countries to see their currencies, stock markets and other asset prices to drop in value.

In Singapore, the economy shrank by 1.4 per cent in 1998 in terms of real gross domestic product (GDP), the first decline since the 1985 recession after an average growth of 14[1] per cent per annum from 1986 to 1997.

In the last quarter of 1997, 4,280 workers were retrenched. The situation worsened in 1998, with quarterly retrenchments averaging about 7,300.

After a slew of measures introduced by the government – which were aimed at lowering business costs and providing relief to individuals and households – the economy rebounded by early 1999: The overall GDP for the whole year grew by 7.2 per cent, much higher than the government’s initial forecast of between -1 per cent and +1 per cent.

What about the other two recessions?


The year 2001 may be remembered as the year the dot-com bubble burst. It was also when the Singapore economy slipped into another recession. By December 2001, the Republic’s unemployment rate worsened to 4.7 per cent, the highest in 15 years, as companies laid off workers to weather a recession, said the Ministry of Manpower.

A total of 25,600 workers were retrenched in 2001, more than double the lay-offs in 2000.

Of the total, 15,900, or 62 per cent, came from manufacturing industries, while 9700, or 38 percent, were from the services sector.

In a speech made in 2009, Emeritus Senior Minister Goh Chok Tong said: “The dot-com bust in 2000/2001 exposed our dependence on the electronics sector. This sector contributed close to two-thirds of Singapore’s non-oil domestic exports then. We responded by diversifying our manufacturing base from electronics to other high value-added sectors like petrochemicals and pharmaceuticals. We signed free trade agreements with our major trading partners. We also promoted entrepreneurship and promising local enterprises. We grew rapidly. Other than for one quarter in 2003 when SARS scared the hell out of us, our growth was uninterrupted until this year (2009).“

He made that speech as Singapore grappled with another slowdown; the Republic officially slid into recession in October 2008 after falling consumer demand from the US and Europe affected its manufacturing exports.

The economy shrank by 6.3 per cent in the third quarter, on an annualised seasonally adjusted basis, having shrunk by 5.7 per cent in the second quarter of 2008.

To help Singapore businesses and workers cope, the government pumped in S$2.9 billion in November 2008 and a further S$20.5 billion Resilience Package in January 2009.

By August 2009, Prime Minister Lee Hsien Loong said “the worst is over for the Singapore economy”. In November that year, the Ministry of Trade and Industry declared that the recession was over.


 

zhihau

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Ho Ho Ho... I see a lot of people in the malls, not many people buying things thou...
 

krafty

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there is no reason for sinkieland to be stagnant when the whole world is progressing.:p
 

Rogue Trader

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In a speech at the Singapore Economic Review Conference last year, MAS managing director Ravi Menon said the 1985 recession “exposed structural strains in the economy, which had hitherto been masked by strong economic growth”.

....


In a speech made in 2009, Emeritus Senior Minister Goh Chok Tong said: “The dot-com bust in 2000/2001 exposed our dependence on the electronics sector. This sector contributed close to two-thirds of Singapore’s non-oil domestic exports then. We responded by diversifying our manufacturing base from electronics to other high value-added sectors like petrochemicals and pharmaceuticals. We signed free trade agreements with our major trading partners. We also promoted entrepreneurship and promising local enterprises. We grew rapidly.


it seems our brilliant scholar minds haven't learn any thing from the past recessions. Our reliance on oil and gas, property and private wealth funds gave Lky his chance to boast about the Golden period... while the foundations of the economy remained weak.

Looks like the party's over and our next generation will pick up the tab
 

borom

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Asset
The Pinoys, Indian FT's and PRC's still living it up in their condos and eating/drinking and celebrating in Orchard while the ministers still paid the highest political salaries in the universe!
Our property prices remains the highest ,so is our food prices and medical cost!
 

johnny333

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Asset
I remember a few years ago watching on TV that KFC guy defending some tax increase in his worfds Sporeans can take a few more tax increases:rolleyes:

Back then I wondered how the PAP MPs would react to a pay cut. I think it's about time to find out. I'm sure by the next GE many of the 70% will share this feeling.
 

johnny333

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Ho Ho Ho... I see a lot of people in the malls, not many people buying things thou...

I see plenty of them in JB. Used to be a regular in JB but with the "lesser mortals" crowd going there, it's getting too crowded there :(

I'll have to find alternative places.
 

krafty

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I see plenty of them in JB. Used to be a regular in JB but with the "lesser mortals" crowd going there, it's getting too crowded there :(

I'll have to find alternative places.

nowadays, i do shopping online and i like ebay, i bought a tool set shipped all the way from shenzhen to OZ and it only cost me $5. quality of the tools are not too bad.
 

frenchbriefs

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Asset

In 1965, Singapore’s nominal gross domestic product (GDP) – one of the primary indicators used to gauge the health of the economy – per capita was around US$500, which put the country at the same level as Mexico or South Africa.


um what??do they know in 1965 australia gdp was only $2000,japan was $900,hong kong $600,malaysia $300 and south korea was only $100?i would say Singapore was doing pretty well for asian standards.Singapore's gdp per cap was no. 40 in the world at that time.

in 1975,monaco and UAE and Qatar was filthy rich,their GDP per cap reached a staggering $27,000 USD while the next closest competitor Sweden was only $9000 USD per cap,america was only $6000 USD per cap while singapore was only a pitiful $2200,still stagnant at number 40 in the world after ten years.

in 1985,america is now catching up to UAE,their GDP is now at $18,000,while japan has jumped to 19 spot at $11,000.........while singapore is still stagnant at $6800 at number 38......

wtf is this?????since when was Singapore or sinkies ever rich????their gdp per cap has always been stuck at around no.40 in the world while Japan and Korea has made leaps and bounds.

south korea was even more incredible......in 1961 south korea gdp per cap was number 91,even poorer then vietnam,their country was totally destroyed by war.......by 1970,south korea jumped to 83.......by 1980,south korea is at 64,1999 south korea was at 38.

https://en.wikipedia.org/wiki/List_...ta#World_Bank_estimates_between_1960_and_1969
 
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johnny333

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I go to JB to get some meds. While I'm there I also like to makan & do some banking but with the crowds at the entry points it is a pain compared to how much easier it was in the past.
 

johnny333

Alfrescian (Inf)
Asset
dont go during peak hours?

I used to go in the afternoons about 1pm but now find it too crowded. I have met & talked to some Malaysians waiting in the lines & they are also surprised by the crowds. I have tried going in the mornings on tuesday, wednesdays & thursdays & it's also crowded.

I now go to Queens Street to take one of those Malaysian buses that go to JB i.e. Causeway Link or SJE, instead of taking an MRT train to Kranji & waiting for bus 170. It saves some time because most Sporeans prefer the cheaper MRT/SBS 170 route.
 

JHolmesJr

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Loyal
The worst periods in Singapore’s economy in the past 51 years
3 Oct 2016

By John Foo

Singapore’s economic growth is losing steam….



losing steam

Is that some sort of code word for totally fucked, in a severe recession, with no sign of light at the end of the tunnel and about to get worse...
 

JohnTan

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Generous Asset
losing steam

Is that some sort of code word for totally fucked, in a severe recession, with no sign of light at the end of the tunnel and about to get worse...

The recession can only be ended if PAP gets 100% of all the parliamentary seats in the next GE. Life for sinkies was good when PAP had full dominance of parliament save for a token Chiam and a bankrupt JBJ hawking his crappy books on the streets.
 
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