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The view from Singapore
Lion city’s battered economy attempts to ride out the storm on multiple waves of stimulus
9 Apr 2020 | Tom King

THE Singapore Government recently announced firmer measures to stem the spread of the Covid-19 pandemic.

In accordance with this, non-essential businesses are required to halt operations from April 7 to May 4. The government also said it will not discourage people from wearing face masks and is in the process of dispensing reusable masks to every household in the city-state.

Despite the governments very best efforts since Covid-19 first made its presence felt, the tally of those infected with the virus has regretfully crept up.

And although the number of deaths recorded in the Lion City is mercifully low and those who died mostly had underlying health issues, any death from this dreadful infection is one too many.

The Singapore government has to be commended; it has been in proactive mode for months reacting assertively with its efforts to stay ahead of the Covid-19 curve.

When looking at the pandemic as it sweeps over Europe and the US, in context Singapore is not faring badly.

To date almost S$60 billion has been set aside to help Singapore ride out the storm including S$21 billion pulled from the nations reserves.

So now, in an effort to create a fire break and prevent further spread, the majority of the working population in Singapore are performing their daily duty from home.

Following the government’s latest move it is clear more masks are now being worn and the supermarkets appear to have comfortably ridden out three or so abnormal storms of demand.

When you bear in mind Singapore has no agricultural hinterland and very little in the way of natural resources, securing food and other essential goods, i.e. ‘toilet rolls’, is a prerequisite.

From April 9 a substantial number of bank branches will be shuttered through to May 4. This is aligned to pre-emptive measures by the banking industry in Singapore which aim to support the government’s efforts to minimize social interactions in the community amidst the evolving Covid-19 situation.

These actions will undeniably drive customers towards the various digital options that DBS, OCBC and UOB have rolled out over the past few years.

Those initiatives of course were created for efficiency, crafting more services and saving costs. No one though could have foreseen the current isolation scenario. 

The plethora of e-services available from government and corporates in Singapore will also now be well patronized. 

To help fintechs get through the crisis the Monetary Authority of Singapore (MAS) also revealed a S$125 million support package to sustain and strengthen capabilities in the financial services and fintech sectors.

The MAS wants the support package to help position financial institutions and fintech firms for stronger growth when the threat of Covid-19 declines and economic activity returns to pre-virus levels.

Undeniably the financial sector will have been badly bruised by recent events, and the first quarter numbers from the trio of local banks are sure to make for prickly reading.

As for work itself, while many banking and financial services roles can be accommodated in a ‘home office’ that is not the case where reams of cutting-edge technology or face-to-face client consultations are required.

Several global firms already enacted their contingency plans in February with teams divided and some working remotely while others worked in off-site specialist locations.

Traders, for instance, cannot easily work from home for a myriad of reasons including security, compliance and technological constraints. Contemporary trading systems for major global banks are not set up to operate completely remotely.

The Covid-19 hit to the greater economy looks serious however. Many in the hospitality, F&B, retail and SME sectors look vulnerable. Perhaps nowhere is it more noticeable though than at the nations flagship carrier Singapore Airlines.

With over 90% of its routes not in operation, the company, which is efficiently run, is cost conscious, and has legions of loyal patrons across the globe, has had to raise about US$13 billion to help it through the crisis.

Fortuitously for it, Singapore Airlines secured the funding without too much trouble, supported by its majority shareholder, state-fund Temasek Holdings.

The airline is also the key sponsor for the Singapore F1 night race, to which it pumps in around US$10 million dollars.

And while the race itself has not yet been postponed or rescheduled, it seems extremely questionable if the airline will be in a position to underwrite that amount for 2020 during the current economic malaise if citizens are struggling financially.

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