I paraphrased a Morgan Stanley Research appraisal for the Singapore economy released on June 16.This research report expects the Singapore economy to expand by 3% in 2010, albeit 'unevenly'.
Their anticipation:
i) Business investments will be slow in coming. Say bye-bye to the go-go growth years of 2006-2007
ii) The property boom will be back but without the full gusto and turbo impact of 2007 and 2008.
iii) Capacity built-up utilisation in financial markets will take some time to be digested as the economy stabilises and keel even.
Interestingly, based on how the global fallout is affecting home economies, and the various governments' ability to respond to the downturn,the bank’s order of preference for investment puts Indonesia on top, followed by Malaysia in second place and Singapore, in third. Thailand was placed fourth place.
Morgan Stanley is happy policy-wise with Singapore which has taken cognizant of its limitation-its dependence on external demand. As such, turnaround must be export-led. So far, they like the government's moves in striking a balance between intervention and when to leave growth engineering to market forces.
A potential policy scenario painted by Morgan Stanley:
In the event the G3 economies (United States, Europe and Japan) fail to see a quick-V-shaped recovery or continue to suffer a prolonged downturn,then Singapore must find new ways to buttress the export-driven model by scouting and looking at new sectors and new geographies. This is wise advice from Morgan Stanley but not easy to do.....
"One way out: restructure the economy to respond in the new, more sober environment post sub-prime." This is apparently the parting shot from Morgan Stanley.
Tongue-in cheek?
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