Singapore — The speed of economic recovery depends on how available rapid test kits would be and the development of a vaccine, said Trade and Industry Minister Chan Chun Sing in an interview with Bloomberg Television on Wednesday (May 20).
He said: “If either one of these or both come about in the next few months, then I think there’s a much better chance of us recovering faster.”
On a positive note, he added that, according to recent data, there has been an uptick in exports. However, the challenges to the economy remain myriad, and so the Government has not become “complacent”.
“We are quietly encouraged by some of the positive numbers coming in for the first quarter despite the headwinds,” he said, although he acknowledged that “the downside risks are still many”.
As Singapore’s economy relies heavily on exports, it has been badly affected by the Covid-19 crisis. The country’s GDP saw its worst performance since the global financial crisis of 2008 when it fell 2.2 per cent in the first quarter of the year.
Mr Chan said the country’s unemployment numbers have held relatively steady, in the large part because of stimulus measures. He added that new plans for helping this year’s graduates find either employment or apprenticeship programmes will be announced.
But he emphasised that the labour market is likely to be problematic all over the world. “What started out as a health crisis has now gone on to an employment and business closure issue.”
He also said that it is too early to tell whether or not the world has seen the worst of the pandemic.
Therefore, since there are asymptomatic cases of Covid-19, a test kit that would show accurate results quickly would serve well in the endeavor to return to activities such as international travel. Mr Chan added that there is a possibility of starting a travel corridor with such countries as New Zealand, South Korea, China and Australia, once protocols have been established.
In a Facebook post also on Wednesday (May 20), Mr Chan wrote about his Bloomberg interview. He also outlined “four sets of risks” as different countries around the globe begin to reopen.
Interviewed by Bloomberg TV this morning. Even as the world gradually reopens, there are still several downside risks in…
“Firstly, there is a high risk of recurring infection waves amongst many countries.
Secondly, beyond the urgent need to suppress the epidemic curve, we have to flatten the unemployment and business closure curves.
Thirdly, there are policy-induced risks as some countries may take on more protectionist measures during this period, when we should be looking at greater inter-dependence for better resilience.
Finally, many countries will need fiscal resources to support their businesses and workers through this period, but not all of them may be able to do so and they may resort to quantitative easing or competitive devaluation to get their economies back on track. If so, there will be severe global knock-on effects.”
Mr Chan added that Singapore, as a free and open economy, welcomes investments from all parts of the world, “be it China, Europe, India or US”.
He said that, with the relaxation of Singapore’s circuit breaker measures on June 2, essentially more than three-quarters of the economy will be able to resume normal activity.