Wednesday 06 Oct 2021 | 23:01 | SYDNEY
Wednesday 06 Oct 2021 | 23:01 | SYDNEY

An Asian canary sings


Graeme Dobell

20 August 2009 09:00

Just as miners used a canary to detect bad air, Singapore has always been one of Asia's economic canaries. And as Asia starts to think the worst of the economic crisis is passing, Singapore is a singing canary. (Consider yourself spared, dear reader: I originally put together a far more intricate Singapore-Sings play-on-words.)

Being in Singapore for a few days entitles a journalist to write a 'mood has changed' story. In my craft, the rules of evidence run: one incident is an anecdote, two constitute a trend, and three offer firm statistical proof! When I was in Singapore at the end of May, the mood among the commentariat was dark, with nobody sure where the bottom of the slump would be. Not so, less than three months later (although plenty of restaurants are still offering 'buy one, get one free' deals).

As the Prime Minister, Lee Hsien Loong, said in his annual National Day speech on Sunday: 'Now the eye of the storm has passed.' Singaporeans are voting with their wallets. In July, they set an all-time record for sales of new private homes. Beyond anecdotage, The Economist devotes its cover this week to 'Asia's astonishing rebound.' To quote its article, the economic green shoots appearing in the US 'are nothing by comparison with the lush jungle sprouting in the East. Asia’s emerging economies probably grew at an average annualised rate of over 10% in the second quarter.'

Asia could not decouple from the US in going over the cliff. But the rebound optimism is that Asia is certainly going to change the order of the linkage by leading the way back to growth.

One aspect of the Asian discussion with implications for the Australian political debate is the belief that big government spending efforts will help make this a V shaped slump: sharp down, but sharp up again, too. The big government stimulus packages bloomed across Asia. The Singapore version was a S$20.5 billion Resilience Package. Asia may not have heard the Australian Treasury advice to the Rudd Government to 'go early, go hard' with stimulus, but Asian governments certainly shared the policy prescription.

The reference point for Asia in judging degrees of economic badness is the 1997-98 financial crisis. And the emerging mood seems to be that this time is not going to be as bad. The 97-98 crisis produced some profound political changes as well as deep financial pain. As the economic prospects begin to brighten, some of the conversation is turning to what the political impacts will be this time. That political dimension will be the subject of my next column.

Photo by Flickr user meophamman, used under a Creative Commons license.