The World Bank Group (WBG) has announced it will set up a new office in Singapore, its first outside Washington DC. It said the new branch will employ over 70 people within three years, including director Bert Hofman, the bank’s current Chief Economist for the East Asia region.
The WBG office’s main purpose is to advance private-sector investment for infrastructure projects in East Asia’s developing regions, with ready access to Singapore’s large commercial banks and established companies. Channel NewsAsia reports it will also provide services through its Multilateral Investment Guarantee Agency (MIGA), which has experience with complex infrastructure projects and supports investments into and from Asia “by issuing risk guarantees to equity sponsors, banks, funds, and other financial institutions.”
source & article: Channel NewsAsia
Foreign white-collar workers looking for a share of Singapore’s prosperity may soon find the going a little tougher. Prime Minister Lee Hsien Loong used part of his National Day speech last week to promise concerned citizens that conditions for employment passes would become stricter, with higher salary and qualification requirements.
As sectors of Singapore’s economy soared in the past year, so did threats of inflation and housing prices, causing many locals to worry whether they’d be able to compete for even average-salaried office jobs to pay for it all. These concerns rattled Singapore’s ruling party, the long-serving People’s Action Party, which recorded a record low (though still relatively high) 60% share of the vote at the most recent elections.
In his speech, PM Lee cautioned Singaporeans against becoming xenophobic towards foreign workers and reminded them the country would remain open to immigration. The raised minimum monthly salaries for the three types of employment visa (Q, P1 and P2) represent a 12-14% increase and will now be: S$2,800 (US$2,318), S$4,000 (US$3,311) and S$8,000 (US$6,623) respectively.
source & article: Xinhua (via philstar.com)
Singapore will benefit from the current panic surrounding international markets, growing in stature as a financial hub as economic power shifts to the emerging world. Results from a survey by the Association of Chartered Certified Accountants (ACCA) of international financial centers revealed 61% of finance professionals rate the city-state as having grown in importance, well above the global average of 36.
The Global Economic Conditions (GEC) Survey measures the ‘significance’ of global financial hubs and the impact of the 2008-09 Financial Crisis by examining the opinions of 2000+ financial professionals around the world. 46% of all Singapore-based respondents now believe their location is a ‘center of global significance’ compared to the global average 18%, and 34% rated it a center of regional significance.
This is despite a surprising loss of confidence across the Asia-Pacific region, mainly due to disruption caused by the Japanese disasters in March and general pessimism over economic crises in the USA and Europe.
There were also concerns about monetary tightening and inflation, with 32% of respondents claiming to have had difficulty accessing finance and 71% reporting a rise in business costs. Governments around the world would also cut spending in an attempt to reduce inflation.
Darryl Wee, country head of ACCA Singapore, said: “It’s not a secret by now which way the global balance of power is shifting. What’s more interesting are the detailed findings which show a small group of global financial centres, including Singapore, enjoying an ever-growing advantage over their competitors. Going forward we expect that many emerging economies will redouble their efforts to develop global financial clusters.”
In a first-ever joint venture between the neighboring sovereign wealth funds, Singapore’s Temasek Holdings Pte Ltd and Malaysia’s Khazanah Nasional Bhd are planning RM30 billion (US$9.86 billion) worth of cross-border development projects in Singapore and the Iskandar Malaysia region.
Business Times reports a large portion of the money invested will be in Singapore, with Khazanah owning 60% of a new joint venture project called M+S Pte Ltd with a Gross Development Value (GDV) of RM27 billion ($8.87 billion). The development, in Marina South and Ophir Rochor, will be a mixed-use residential, office, retail and hotel complex of over 500,000 square meters in gross floor area.
On the Malaysian side, Khazanah and Temasek will be equal partners in a RM3 billion ($986 million) GDV project named Pulau Indah Ventures Sdn Bhd with a gross floor area of 1.37 million square meters starting in Johor’s Medini North and the Heritage Cluster at Medini Central. The project, in the vast Iskandar Malaysia development region bordering Singapore, will “build on the momentum” of the development’s existing and planned projects with commercial, retail, health and residential facilities, many of which Khazanah has played a part in since the beginnings of Iskandar in 2006.
The two government-controlled companies will work closely with established real estate development firms in both countries, like Malaysia’s UEM Land Holdings Bhd (Khazanah’s property arm) and Singapore’s Mapletree (part of Temasek’s portfolio) and CapitaLand.
source & article: Business Times
The current labor market is weighted so heavily in favor of employees that many Singapore employers are finding themselves bowing to their demands, according to this report. Singapore’s unemployment is at a three-year low of 1.9% with around 139 jobs for everyone 100 workers, the service sector accounting for 73% of vacancies.
Under these conditions bosses have found themselves having to deal with interviewees asking for higher pay, fewer hours, or even disappearing after accepting better offers. Contractors, temps, part-timers and older workers have stepped in to fill some gaps, with many companies unable to hire more foreign workers due to quotas. Even in sectors with less growth, such as manufacturing and construction, workers have demanded more money.
While it all seems like a paradise for employees, some economists have warned the increasing overhead costs risk inflation and higher consumer prices overall. Should Singapore’s growth slow, people may end up paying more for goods while opportunities to earn money decline.
source & article: Straits Times via The Jakarta Globe
A very interesting week the Southeast Asian air travel industry, with some big news coming out of the International Air Transport Association (IATA) meeting in Singapore. Some highlights were:
Malaysia Airlines (MAS) will join the Oneworld Alliance, joining a network that spans 900 destinations in over 146 countries. Members of the alliance align their various policies and procedures and adopt common specifications in service, engineering and maintenance, also reducing costs through parts-sharing and bulk buying. MAS’ entry, which was sponsored by Australian national carrier Qantas, saw the share price rise 1.4% to RM1.44, its first increase in three trading sessions. The Oneworld Alliance also includes British Airways, Cathay Pacific, American Airlines and Japan Airlines.
Singapore Airlines and Virgin Australia announced a long-term partnership, giving each access to dozens more routes in the Asian/Australian/Pacific region and enabling frequent fliers to earn and redeem points for each other’s flights. Two quirks of the agreement were: (1) it must still be approved by regulators before going ahead; and (2) it excludes the lucrative Australia-US routes long coveted by SIA, but from which it has been blocked by the Australian government.
Meanwhile, Singapore’s international gateway Changi Airport announced its passenger traffic would surpass 50 million a year by 2014. It’s already serving 42 million at present, and officials said it would have reached the 50 million mark even sooner if not for the global financial crisis a couple of years ago. Low cost carriers supply 22% of Changi’s numbers, while traffic to and from destinations in Southeast Asia and Northeast Asia grew 18%, compared to the airport’s total traffic growth of 13% in 2009.
sources: Bloomberg, The Star, IATA, Yahoo! Singapore, AirportBusiness.com
The Singapore Government has launched a new initiative to encourage medical technology startups, offering a S$40 million (US$32.6 million) fund under the Biomedical Science Accelerator (BSA) Program.
Singapore’s entrepreneurship promoter SPRING Singapore said its investment unit SPRING SEEDS Capital will manage the program, identifying ‘high-potential med-tech startups’, investing in them on a one-to-one basis and assisting the sector to better commercialize the intellectual property it develops.
Biotech is a key contributor to Singapore’s economy, consisting of 10% of Singapore’s manufacturing output and employing 13,000 people. The BSA program acknowledges that startups in the field often struggle with its knowledge and capital intensive nature, and aims to help those with innovative ideas succeed.
source & article: Today Online
Here’s some food for thought for anyone who says Singapore’s impressive GDP growth is entirely due to its China connections: Singapore’s GDP overtook Hong Kong’s in the first quarter this year and is projected to be larger at the end of the year.
Singapore’s quarterly nominal GDP was US63.9 billion, 10% higher than Hong Kong’s at $57.9 billion, according to a report by Bank of America Merrill Lynch economist Chua Hak Bin. It’s worth noting that Singapore’s dollar is free-floating while Hong Kong’s is pegged to the USD. The S$ has gained 8.2% against the Hong Kong dollar in the past year and 23.3% in the past decade. Still, Chua says it would have been “far fetched” to predict such a development just a decade ago, given Hong Kong’s greater proximity to China and Singapore’s more volatile neighborhood at the time of the Asian financial crisis.
Singapore’s population is also just 5.1 million, while Hong Kong’s is 7.1 million. The two find themselves frequently compared due to their status as independent (or autonomous) city-states, majority ethnic Chinese populations and the significant role played by the financial services sector in both places. Singapore recently revised its GDP growth forecast for 2011 up from 4-6% to 5-7%. Hong Kong is still no slouch, with 7.2% growth in Q1 2011 and its own upward-revised annual projection of 5-6% (from 4-5%).
source & article: Economic Times (India)
Lutts is enthused by what he saw on a 10-day Southeast Asia tour. Singapore’s economy, he says, rises and falls alongside global trade volumes with its dominance in financial services, insurance and property management. Its busy port also serves as a ship management and repair hub. Singapore’s leaders are “very savvy… really great business leaders” with policies that help drive the economy.
While he thinks Malaysia’s drive to achieve developed nation status by 2020 is “a tall order”, he believes the government’s policies are on the right track, are “constructive to capital development” and will grow GDP somewhat.
Inflation remains a major concern for governments right across Asia with no signs of success yet, he says, but hopes that higher wages will help drive inflation. He also thinks Asia offers some lessons for the US: governments that destroy capital will see investment go elsewhere, while Asia’s leaders seem to know how to balance budgets and keep debt to a minimum.
source & article: International Business Times
Singapore will host ‘TravelRave 2011′ from October 17-23, a series of related events designed to showcase business opportunities in the Asian travel industry. It will be the second of its kind, after the success of TravelRave last year saw 8,000 participants.
Along with the region’s economies and middle class wealth, Asia’s tourism industry is booming and the number of international arrivals grew 13% last year over 2009. The Singapore Tourism Board, which organizes the event, says it’s Asia’s ”only mega tourism and travel festival” and will show that Asia is leading the world’s tourism industry recovery.
Bringing all the events to one time and place should ease things for attendees. Events will include the ITB Asia travel fair, a conference on hotel and tourism investment, an annual meeting of Asian convention and travel bureaus, and a nice-sounding ‘retreat’ for policymakers and industry leaders hosted by the UN World Tourism Organization.
source & article: AFP via Yahoo! News