April 26, 2017


by Daniel Yap

AFTER his shock-inducing announcement that HDB owners should not expect to get their flats redeveloped at the end of their 99-year lease, which means the value of a 99-year-old flat is practically zero, Minister for National Development, Lawrence Wong is now saying that HDB flats are “a good store of asset value”.

It seems to do little to solve the problems that owners (leaseholders, really) of end-stage leases are facing – possible homelessness or having to shell out tons of money for stuff they wrongly assumed they’d get for free. And those who panicked at the initial reminder that a 99-year lease only really lasts for 99 years will be wondering – what does Mr Wong mean to say now?

Is he trying to calm down stunned flat buyers who thought that the value of their home was a sure thing?

HDB flats are “a good store of asset value so long as you plan ahead and make prudent housing decisions”.

Ah, but the good minister did include a caveat, although he didn’t explain it. His whole phrase is that HDB flats are “a good store of asset value so long as you plan ahead and make prudent housing decisions”. What decisions exactly? What’s the key to unlocking all of this asset goodness, if indeed there is any to be unlocked?

There are two ways of viewing something as an “asset”. The first is that an asset is something you can use to pay off liabilities, for example loans. That’s why you can’t (and shouldn’t be able to) take a housing loan for more than your house is worth. That’s also why banks are not happy at all when you miss a mortgage payment. It means that the value of the money you owe in the loan gets dangerously closer to the money they can get if they repossess and sell off your house, should it come to that.

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The thing about assets is that for every upside, there is a downside. Inflation eats away at the value of cash, property, everything. Markets go up and down, and you cannot guarantee that you will exit in the black. And some assets depreciate, like HDB flats, which run down to zero after 99 years. The ownership of any asset bears some degree of risk.

You just have to make sure that the risks are smaller than the returns.

There’s a second way to look at something as an asset. It is a more “business” approach, where something that is an “asset” is supposed to generate income. Like a factory building or a machine. It can also be something that generates income over a longer period of time (or which can be liquidated for capital gains), like Singapore Government bonds, or stocks.

So, what Mr Wong may be saying is either a) buy and sell and finance your HDB flat in a way that makes your returns greater than your risks or b) rent it out for income (as in rent it out not to cover mortgage payments, but at a price that is higher than depreciation and the costs of rental – agents, repairs, fees).

Taking advantage of renting out for income is straightforward – you get permission to rent out and then you pay money (either your own costs or you hire an agent) to put your property on the market and maintain it.

Taking advantage of buying, selling and financing is also simple (but not necessarily easy). All you need to do is recognise that the market is irrational. If you told any accountant that asset X would last for 100 years and cost $100,000, they would depreciate it (say on a straight-line basis) at $10,000 a year. Or maybe accelerate the depreciation in the first few years.

The money you spent on renovations too should be depreciated (including original fittings), say over 15 years, which is when you may need to renovate again. This is how we do cars – we know that a COE lasts for 10 years and there’s a PARF rebate and a “scrap” value, so every year the value of a car goes down by a certain amount.

Not so for HDB flats. Market values actually rise over time even as the life-span of the asset falls. It may be some kind of hyperbolic discounting (read about how it makes you stupid in our linked story) or people are just plain crazy. But take advantage of this! Buy a BTO flat that is much larger than you actually need, rent out a room and then when the five-year minimum occupation period is up, sell the whole thing and downgrade to a newer, prudent sized unit. Or just sell the older unit and buy a same-sized newer unit every 10 years or so, before people start to get jittery about the HDB flat you’re selling having only 60 or 70 years left on its lease. It should still fetch about the same price. Because people are crazy.

Eventually, when it’s just you and maybe someone else living in your home, you can downgrade further to use your asset (the market value of your HDB flat) to pay for your liabilities (daily expenses, travel, etc), if you’ve preserved it well. If you’re retired, a chunk of that money is likely to go into your CPF, because the housing loan goes back in, with interest (and then gets paid out via CPF Life).

But no matter what age you do it at, the bottom line is this – let it go. If you never sell your depreciating asset, you’ll never get any cash out of it at all. And the “prudent housing decision” you need to make is to take advantage of people who will shell out as much for a 30-year-old flat as a 10-year-old one (especially when the renovation looks fancy).


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By Ryan Ong

ALTHOUGH they’ll never admit it, a large part of the finance industry aim to convince you that what they do is very complicated, and impossible to understand for anyone short of a NASA scientist (that’s why you better pay them to manage your money for you). Over the past two decades, one of their secrets has been the ETF – a straightforward financial product that makes them look like geniuses, while actually proving the opposite. You should at least have a basic grasp of the concept:

by Suhaile Md

VACANT retail spaces hit an all time high last September with a vacancy rate of 8.4 per cent according to the Urban Redevelopment Authority (URA). Still, that has not got in the way of new malls popping up. Just last week (Mar 29), it was announced that SingPost Centre, which has five levels of retail space, will open in the second half of this year. And there are at least four other – more expensive – such projects that are expected to open by end of 2019.

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Here’s a rundown of the five malls:

1. SingPost Centre

The centre, next to Paya Lebar MRT station, has about 176,500 sq ft of net lettable area for retail. That’s the amount of space available for rent. Speaking of which, the usual suspects have signed up as tenants: NTUC FairPrice supermarket, food court operator Kopitiam, and cinema chain Golden Village, which makes for a pretty healthy bunch of anchor tenants (tenants that bring in significant human traffic). Besides the mall, the new 3,200 sq ft General Post Office will also be sited at the centre. It will cost about $150 million to construct it.

Hopefully, some new names or independent retailers will show up to add some variety. Failing which, at least there’s something else to look forward to: The centre “completes the omni-channel eCommerce experience by bringing together retailers, customers and eCommerce last-mile fulfilment”, said SingPost in its announcement last week. It’s not exactly clear what that means, but it sure sounds fancy.

2. Paya Lebar Quarter

At $3.2 billion, this is quite the project. It occupies 3.9ha of land and it will consist of three office blocks and three condo blocks. Then there’s the 340,000 sq ft seven floor retail mall. It will open in 2018… just around the corner from SingPost Centre.

Guess which retailers have already signed up? That’s right, NTUC FairPrice Finest and Kopitiam. They will take up 22,000 sq ft and 15,000 sq ft of space respectively. Otherwise, about 200 stores and a cinema are expected to open. About 30 per cent of the tenants are expected to be food and beverage operators.

The Paya Lebar area is actually slated by the URA to be a commercial hub, as part of a plan to move offices away from the city centre to spaces nearer to residential areas to cut down on congestion. That’s probably why so much development is taking place there.  Australian company Lendlease is the developer for this project.

3. Marina One 

The mixed development primarily focused on office space – 1.88 million sq ft of it. Bigwigs like Facebook, Swiss private bank Julius Baer and consultancy firm PwC Singapore are tipped to move in. The Temporary Occupation Permit is expected to be issued sometime this year. Tenants can move in once it’s issued.

There’s 140,000 sq ft of space dedicated to retailers. Supermarket chain Cold Storage and food court operator Koufu are confirmed as anchor tenants. Sounds just like NTUC FairPrice and Kopitiam, just more atas.

The supermarket is expected to be the largest in Marina Bay. Smaller tenants like Japanese restaurant Teppei Syokudo and 4 Fingers Crispy Chicken are also confirmed.

Gym chain Virgin Active will occupy 26,000 sq ft over two floors. There’ll be an indoor swimming pool and climbing wall among other things. 

At $7 billion, this project is more than twice as expensive as Paya Lebar Quarter. It’s a 60-40 joint venture between Khazanah Nasional Berhad and Temasek holdings, the sovereign wealth funds of Malaysia and Singapore respectively.

4. Northpoint City

It’s a mixed development as well, including the air-conditioned Yishun bus interchange, 12 residential blocks, and of course, a mall. But at least it’s something that’s more than just office space and supermarkets. Northpoint city will have a shopping centre which will house Singapore’s first community club in a mall, rooftop community garden, and a town plaza. The plaza is basically an open space to hold events. It spans 4,400 sq m (47, 361 sq ft) which is about the size of 10 basketball courts.

Frasers Centrepoint, the owners of the mall, bid $1.43 billion for the plot of land in Yishun in September 2013. This was 47.4 per cent higher than the second highest bid, reported TODAY. Wow, somebody really wanted the plot.

The mall is expected to open sometime next year. It will expand upon the existing Northpoint Shopping centre, doubling the number of retail and dining outlets to over 500. This will make Northpoint City the largest mall in northern Singapore. Yishun pride ok.

5. Jewel Changi Airport

Of all the malls on this list, Jewel Changi Airport is by far the most unique: There’s a five-storey garden and an indoor waterfall, 40 metres high. The garden will have about 2,500 trees and 100,000 shrubs from countries including Brazil, Australia, Thailand and the United States, reported the Straits Times. We just have to prove to tourists how much of a garden city Singapore really is.

The design won the 2016 International Architecture Award. The Jewel Changi Airport will have five storeys above ground and five basement levels with a gross floor area of 134,000 sq m (1,442,364 sq ft). There will be about 300 shops and food outlets and it’s expected to open in early 2019. It costs about $1.7 billion.


Featured image Marine One Project by Flickr user Nicolas LannuzelCC BY-SA 2.0

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By Ryan Ong

NEW private home sales (excluding Executive Condominiums) more than doubled in February 2017, to 977 sales from 382 in January. If you think that’s dramatic, wait till you compare it to February 2016 – there were only 303 new private home sales at the time. That marks an increase of over 222 per cent over the same time last year. In fact, February 2017 sales volume was so good, it was the highest ever recorded for a February since 2012, just before the last property peak in 2013:

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by Ryan Ong

AFTER two World Wars and several centuries of armoured men trying to stab each other to death, you’d think Europe could finally be unified. It was kind of on its way to doing just that; then in 2016, UK Prime Minister David Cameron held a referendum on whether the UK should leave the European Union (EU). It was to prove some point or other, which nobody now nor ever will care about. Now, current UK Prime Minister Theresa May had exercised Article 50, which will bring the UK out of the EU, and have longstanding repercussions:

by Suhaile Md

KATONG Shopping Centre (KSC) has failed its latest attempt at a collective sale, confirmed Ms Christina Sim, Director of Capital Markets at Cushman & Wakefield (C&W), yesterday (Mar 27). C&W is the exclusive marketing agent for the property.

The public tender for the freehold property which closed on Mar 13 had only one bidder, whose offer was “below the reserve price” of $630 million, she said. The reserve price is the lowest offer a seller is willing to accept. Ms Sim declined to reveal the exact offer but confirmed it was a China-based company.

This third attempt was made when the earlier attempt late last year was thrown off course by the Urban Redevelopment Authority (URA). The URA shot down the original proposal for a fully commercial mall due to concerns about traffic congestion. Appeals were made even as an ongoing public tender closed on Sep 1. It’s unclear how many had bid for it then.

URA put its foot down. So the proposal had to change to that of a commercial/serviced residence use. Due to the change of plans, another public tender – which is the latest – was opened from Feb 27 to Mar 13. The reserve price was kept the same.


The first attempt

Owners of the strata-titled property had expressed interest in a collective sale as early as 1993, said Mr Winston Low, who bought his first unit at KSC in 1976. But formally, there was “no action” taken until late 2009 when the first Collective Sales Committee (CSC) was formed with Mr Low as the chairman of the CSC. The Dennis Wee Group soon came on board as the marketing agent.

That was the first attempt. However, their efforts fell through in 2010, and did not even make it to the public tender stage, because the reserve price of $440 million was not “attractive enough” for some owners, said Mr Low. As such, less than 60 per cent of the owners, by share value and strata area, signed the collective sales agreement. The law requires an 80 per cent majority for buildings more than 10 years old. KSC is over 40 years old.

The second, and current, CSC was formed on April 24, 2014. Mr Low remained on the CSC but was no longer chairman. The marketing agent was also changed to C&W.

Tenant Mr Chang Kheng Siang was relieved to know that KSC would not be closed anytime soon. Said Mr Chang: “If close, then must retire. Difficult to get place, frankly speaking… all now new building the rent high.”

Mr Chang currently pays over $1,000 a month in rent, for the 200 plus sq ft unit in the basement, to run his New Katong Aquarium shop. Had the 62-year old set up elsewhere, the price would easily double. It also helps, he added, that he has a good relationship with his landlord.

St James Bookshop owner Mr Ronald Neo on the other hand, was “not too worried” as he was prepared, and already had “another place in mind” within the Katong area. The 49-year old has been in the business for more than 20 years and has regular customers. He has shifted at least “three times” since 1987 but since it was always within the Katong area, his customer base was secure. Mr Neo declined to reveal how much he paid for rent.

There are 459 owners, with 425 units in the 87,000 sq ft mall. The owners stood to make a tidy sum had the sale gone through. For example, Mr Low’s two unit space, at over 400 sq ft, cost him $110,00 in 1976. But now “based on signing valuation” it’s between $1.3million and $1.5 million, said the 65-year old.

Owners with a larger share, like City Developments (CDL), stand to make a killing. It owns 60 units and 323 carpark spaces at the mall, reported ST last year (Jun 8).


Curious to know more about the old mall? Read: Katong Shopping Centre: Maid agencies galore.


Featured image from TMG file.

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by Abraham Lee

WHILE the old saying goes, “Choose a job you love and you’ll never work a day of your life”, it’s almost unrealistic to assume that you’ll continue to love your job like the first time you were exposed to it. The lucky ones among us might, but certainly not every worker.

Moreover, although we often glorify the career paths of those who followed their dreams to do what they want like Steve Jobs or Bill Gates, life doesn’t always go according to plan. No wonder the old saying has since been ‘updated’ to read, “Choose a job you love and you’ll never work a day of your life… Because that field isn’t hiring”.

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Nevertheless, having a plan for what you want to do is a good place to start when deciding which university or higher learning course to pursue. At the same time, it’s also good to be realistic – to understand the need to also love what you eventually do and keep an open mind about your career prospects as you plan for the future.


Doing what you love

If you don’t yet know what you actually love doing, a good place to begin is to think about your own strengths and interests. This will help to narrow down the industry or field you want to enter. For example, if you’re especially good at analysing and handling numbers, and interested in insurance, finance and risk management, you may want to consider a career in actuarial science.

Or if you love kids, have a passion for a certain subject and teaching that subject, you may prefer becoming a teacher. To help you find the job you’re most suited for, you can apply for internships or temporary jobs in the field of your interest, gain the opportunity to meet new people you may not otherwise have met, and valuable experience towards crafting a career that you’re actually passionate about.

With the emphasis on embracing the challenges of the digital age on innovation, National Trades Union Congress (NTUC) is organising networking sessions to bring together people from different industries to share and receive insights. The future of the economy lies in this cross-pollination of ideas, and companies are increasingly looking for problem-solvers with skills spanning across different fields. It’s relevant for students planning for their futures to look forward and keep an open mind about how their various strengths and interests can fit into these trends.

For example, through design thinking, an increasingly popular problem-solving methodology, designers can combine their technical expertise with their deep knowledge of their product or company to tweak processes and improve user experiences. While traditional problem-solving processes start by defining the business goal first and working to deliver the user experience that matches these goals, design innovation involves defining the desired user experience and designing the delivery system for the experience after that.

Ms Agnes Kwek, Executive Director of DesignSingapore Council, said that the industry needs “people who are ambidextrous”. That is, “designers who can code-switch between the creative sense and the pragmatic sense and know what can be reasonably implemented, as well as how to navigate the stakeholder environment”. To get started in design thinking, you can consider a design diploma and degree programme, and building a portfolio of projects that implement what you learn.


Loving what you do

A 2014 study found that 46 per cent of Singaporeans didn’t like their jobs. We placed second in the Asia Pacific region – only behind Japanese workers, 56 per cent of whom didn’t like their jobs. But as important as it is to know what you want to do, so is learning to love what you do.

While we have ideal career paths in fields we are passionate about, our lives don’t always pan out the way we plan them to in reality. Even if we end up in our dream jobs, we may not always do what we like within that role. A large part of succeeding at what you do lies in putting more time and dedication than other people, and this requires love for the job, especially for jobs you aren’t naturally attracted to. Thus, it’s imperative to be able to learn to love what you do.

We can learn a thing or two from those dedicated to their crafts like Mr Jiro Ono, the 91-year-old sushi chef and owner of Sukiyabashi Jiro, a Tokyo sushi restaurant that has won three Michelin stars. In the 2011 documentary Jiro Dreams of Sushi, he said that he entered the F&B business when his parents kicked him out at the age of seven. Yet, he also highlighted the importance of honing deep skills in becoming successful. He said, “Once you decide on your occupation… you must immerse yourself in your work. You have to fall in love with your work. Never complain about your job. You must dedicate your life to mastering your skill. That’s the secret of success… and is the key to being regarded honourably.” He calls this work ethic as the shokunin spirit – loosely translated to mean ‘craftsman spirit’.


Remain flexible and open-minded

It’s also important to adjust your goals as you become exposed to other opportunities and ideas. Mr Lawrence Koh, founder of indoor skydiving company iFly Singapore, had always been interested in flying and skydiving since his secondary school days and “was looking at becoming a pilot or a Commando”. He enlisted with the Commandos and became an officer. Upon the completion of his Platoon Commander tour, he went on to get a degree in Avionics Systems Engineering at the University of Bristol to continue pursuing his love of flying.

It was during his time in the Commandos that he “developed the concept of skydiving simulation for freefall training… to bring the dream of flying to everyone”. At the end of his bond with the SAF, Mr Koh decided against staying on in what would’ve been a “comfortable and secure career”, and instead “stepped out of [his] comfort zone to do something that can change and influence [his] life and others greatly”.

There will always be thoughts of failure but if you don’t try it, you will never know the outcome. Of course, we cannot just make the decision recklessly. We have to plan and prepare for it so that even if we fail, we learn from it and aim to do it better next time.

He left the force in 2008 and became the first to bring a wind tunnel to Singapore when he set up iFly Singapore in 2011. During this time, he drew from his training in skydiving and the Commandos the keen understanding that there was only one chance and failure brought with it “devastating consequences”. Mr Koh said, “I also planned in advance for what I want to do and also contingency plans. This is to eliminate most uncertainties and likelihood of things failing. On execution, I will be pro-active in it so that we can react to the situation if anything unplanned happens.”

He is now planning to expand his business in Asia.

Mr Koh said, “[You] should pursue what [your] dreams are and set [your] minds to it. There will always be thoughts of failure but if you don’t try it, you will never know the outcome. Of course, we cannot just make the decision recklessly. We have to plan and prepare for it so that even if we fail, we learn from it and aim to do it better next time.”

So, to love what you do or do what you love? Why not both?


This article is part of a series on SkillsFuture, in collaboration with MOE and SSG. Read the other pieces here:



by Lee Chin Wee

SINGAPORE’S got talent – or so it seems, pipping Silicon Valley for top spot in the “talent” category in the Global Startup Ecosystem Report and Ranking by Startup Genome released last week (Mar 14).

That Singapore has snatched the top billing shows a changing startup environment here. Startup Genome, a research team which specialises in analysing the global startup landscape, said that Silicon Valley has “lost the edge… five to fifteen years ago” when it “enjoyed a quasi-monopoly on very experienced back-end engineers”.

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What does it mean to be top at “talent”?

How proud can Singapore be of this accolade? Does this mean Ayer Rajah Crescent is poised to be the next San Francisco Bay Area? Not quite.

Although we’ve achieved a top ranking for startup talent, it’s important to understand how this was assessed. “Talent” was evaluated using three criteria: 1. Access; 2. Cost; and 3. Quality of Talent.

Singapore was ranked third best in the world when it came to the accessibility of talent. It is easy for local startup founders to hire experienced engineers, and “obtain a visa for hires from abroad”. It is no surprise that Singapore did well on this metric – even in light of opposition to immigration; the political leadership wants to maintain a reasonably liberal immigration policy. This makes migrant talent far more accessible, compared to other countries.

Singapore was also ranked fourth best in the world for the cost of talent. This refers to “engineer salaries”, which is fairly straightforward: For comparison, the mean annual salary for a software engineer in Singapore is $49,381 whereas an equivalent software engineer in the United States would earn $80,745.

The only other startup ecosystems where talent was cheaper than in Singapore were Bangalore, Shanghai and Beijing. Unlike these cities, however, the cost of living in Singapore is far higher. According to the Worldwide Cost of Living Survey 2017 conducted by the Economist Intelligence Unit, Singapore is the most expensive country to live in as an expatriate – for the fourth year running.

Why is engineering talent in Singapore so cheap? One reason is that startups employ cheaper local engineers or foreign talent because the more expensive local engineers (who command higher wages) are based overseas, or work for established companies back home. Mr Chia Zhe Min, 23, an NUS engineering student, shared that “the really talented and adventurous Singaporeans” tend to go to Silicon Valley due to the “more interesting and vibrant startup culture, and the higher pay.”

Mr Agrim Singh, 24, an SUTD graduate, agreed: “Singaporeans prefer to play it safe, and large companies provide a stable wage and contract benefits that (local) startups may be unable to match.” With startup ecosystems in Silicon Valley and Toronto offering far more competitive pay packages, few home-grown top engineers stay. And when they do, they work for large multi-nationals such as Google.

Many local engineers are also lured into mid-career switches, moving into more lucrative jobs in banking or consultancy. Mr Edwin Khew, President of the Institution of Engineers Singapore, said in an ST report last year: “Engineers, due to their versatile skill sets and problem-solving abilities, continue to be highly sought after by sectors such as business and finance.”

Foreign-born engineers, who are willing to accept lower wages, then take the place of local engineers in Singapore. This depresses wages, which in turn affects the number of promising students who want to study engineering in the first place.

In a Facebook post (which has since been made private) cited by media platform Tech in Asia, Mr Lam Keong Yeoh, former chief economist for the Government of Singapore Investment Corporation (GIC), blames Singapore’s overly-loose immigration policy: “We have been far too liberal in importing cheaper regional engineers and IT staff for over two decades. This has bid down the real wages and working conditions of such professions such that the return on investing in such a tertiary education and career is unattractive to locals.”

This explains why Singapore was placed 10th for the quality of talent. Even though we have easily accessible and affordable talent, it is questionable whether the startup employees here can rival their peers in America or Canada. If you could earn more and work alongside the best engineers in the business by going to Silicon Valley, why wouldn’t you?

It is important to note that Singapore only beat out Silicon Valley on talent because Silicon Valley ranked 20th on cost, while Singapore ranked fourth.

On the metrics of accessibility and quality of talent, Silicon Valley still topped the world. If the G truly wants our startup talent to be world-class, then we may end up slipping down the rankings – because the quality of talent is directly tied to the wages they can command.


Modified from the 2017 Global Startup Ecosystem Report.


Singapore: A world-class startup ecosystem?

Even if one were to accept that Singapore is a world-leader for startup talent, Singapore still fell two places to finish overall 12th in the global startup ecosystem rankings. Singapore ranked behind ecosystems such as Tel Aviv (6th) and Silicon Valley (1st).

The new inclusions of Beijing (2nd) and Shanghai (8th) in this year’s report are a sign that other cities in Asia have no problems catching up with, and surpassing Singapore in the startup scene.


Modified from the 2017 Global Startup Ecosystem Report.

Of the top 20 startup ecosystems, Singapore was dead last for startup experience. The report defined this as “the pool of knowledge and networks that startups can draw on”. As a relatively new player, Singapore lags behind other cities in the number of unicorns (startups valued at over US$1 billion) produced.

We also have the fewest experienced entrepreneurs. It was noted that startup founders based in Singapore were the “youngest in the world”, with a median age of 28 years.

For now, it remains to be seen whether nascent companies can replicate the success of homegrown startups like Lazada, which was sold for US$1 billion in 2016. As the G continues to invest in startups via the Startup SG umbrella, the hope is that it will only be a matter of time before the startup scene here matures. But how much time can Singapore afford in the frenetic race of global tech and entrepreneurship?

We need to look behind the headlines. Is startup talent in Singapore cheaper than that in Silicon Valley? Of course. Is it better than that in Silicon Valley? Hardly.

Is this the Singapore brand we want to present to the world?


Featured image by Sean Chong.

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by Jason Tan

THE first quarter of 2017 is nearly behind us and the global economy seems to have also put its travails behind itself. The world economic outlook is indeed brightening and the world is set for a rosier rest-of-2017.

World trade flows, after a sluggish recovery since the financial crisis of 2008, are increasing steadily; the falls in commodity prices are also likely to be over, putting an end to fears that the world economy may be in deflation mode. Manufacturing in various large economies stands at multi-period highs, driven by rising exports.

This economic upswing on a global level is primarily supported by an accelerating American economy. The United States (US) has certainly taken its time to get back to its feet after the debilitating sub-prime mortgage crisis and its aftermath. The US Federal Reserve’s recent hiking of the Fed Funds Rate – the policy rate which is used as a reference for interest rates worldwide – by 0.25 percentage points in March reflects burgeoning confidence in the US economy.

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The American acceleration is ably supported by a nascent revival in the other large, advanced economies, namely, the Eurozone and Japan. China – a source of global uncertainty in 2015 and 2016 – has also embarked on a path of lower but more stable and high quality growth. This has had the effect of injecting impetus into the global economy through trade and investment flows.

East Asia, including Asean countries, has benefited from the export turnaround and will enjoy greater economic gains in the year ahead. Export-oriented economies such as Singapore, Malaysia, Thailand and Vietnam will be outsized winners from the resurgence of the G3 bloc and the consequent boost to global trade flows. Even Indonesia and the Philippines will stand to gain from the increased demand for raw materials and other commodities.

This will come as a relief for economies in general as we put behind us the unsettling episodes of the recent past such as the oil price collapse in late-2014, the Chinese stock market crash in mid-2015 and subsequent fears about dwindling foreign reserves as capital outflows fled from China, Brexit and the election of Mr Donald Trump to the presidency in the US.

However, there remain salient risks which could upset the applecart.

First, US President Trump’s fiscal policies remain largely unknown. He has mooted a trifecta of deregulation, corporate tax cuts and large-scale infrastructure development as the cornerstone of his fiscal plans. Yet this fiscal stimulus could cause an accelerating US economy into overheat and force the Fed to adopt a tighter monetary policy stance.

Second, US-China relations remain clouded by Mr Trump’s rhetoric of China being a currency manipulator and unfair trade partner. Any unilateral trade sanctions imposed by the US on China will have knock-on effects in Asia, given the interconnectedness in the region. Furthermore, it will darken the already dimming mood for globalisation and free trade – which Asia is so dependent on.

Third, North Korea is the most pertinent geopolitical risk that could derail the rosy economic outlook. The recent death of Mr Kim Jong Nam, brother of North Korean leader Kim Jong Un, at the Kuala Lumpur International Airport, ostensibly at the hands of North Korean agents, brought the spotlight onto an increasingly unstable regime in the Democratic People’s Republic of Korea (DPRK). Any implosion in the Korean peninsula will definitely lead to financial market turmoil and currency fluctuations in the region.

The bottomline: The world will likely be a better place in 2017 as the global economy re-awakens on the back of strength from G3 and China. Rising world trade stemming from increasing global demand will feed into economic upswings in export-oriented economies in East Asia and Asean. However, some risks loom large. In particular, political spillovers from the Trump Administration in the US could lead to economic detriments as will a regime implosion in the DPRK.


Jason Tan is an economist at Centennial Asia Advisors, focusing on macroeconomic and geopolitical developments in developing Asia. He delves into social, political and economic issues facing Singapore on the side.


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by Ryan Ong

BUSINESS Times just published a report on how Singapore may be experiencing a two-speed economy. By that, it means our entire economy is not operating at the same pace; one side of it is doing very well, and the other side is about to grow its hair long and drop out of school. The divergence seems to be between export oriented businesses, which mainly make money from customers abroad, and domestic businesses that rely on a local customer base. Here’s what it all means: