http://www.ft.com/cms/s/0/685c3d90-c...44feabdc0.html
Downturn could spread from
Singapore’s ships to shore
By Kevin Brown and Paul Betts
Published: November 5 2009 19:07 | Last updated: November 5 2009
19:07
Anyone wondering why Singapore
has remained calm and prosperous while its economy gyrates wildly
should raise their eyes from the streets and look
offshore.
Singapore has suffered its worst recession since it gained
independence in 1965. The economy contracted by 10 percentage
points in the four quarters to March, but has recovered most of
that in the six months to September. Packed bars and heaving restaurants appeared
to give the lie to the numbers, even after allowing for a fiscal
stimulus amounting to about 6 per cent of GDP. Offshore though,
hundreds of ships lie at anchor, some of them part of the estimated
10 per cent of the world container fleet idled due to lack of
business.
The number of containers going through Singapore’s port is down
about 15 per cent this year, which will be hurting hauliers and
brokers as well as shipping lines.
Now half the banks that
used to provide finance for shipping companies have pulled out of
the market. It could get worse: hundreds of new ships are on order,
many unfinanced. That could help push the proportion of idle box
ships as high as 20 per cent next year.
No wonder, then, that the trend rate of growth in the city state is
likely to shift downwards to somewhere below 5 per cent over the
next decade, as Tharman Shanmugaratnam, finance minister, told the
Financial Times the other day.
- singapore news alternative