Sleep well, S'pore
By Zhen Ming
THIS year has been one filled with sob stories - from everyday investors who have seen their life savings shrink to some others losing their jobs.
(I know of an over-leveraged friend who could soon lose his home.)
But in every downturn, there'll also be winners and what has happened in 2008 is no exception.
So here's my take on how Singapore, as a people, has weathered 2008's financial firestorm:
Our resilient economy
As of last year, Singapore was the world's 44th or 45th largest economy, depending on whether you wish to rely on comparative data provided by the International Monetary Fund (IMF), the World Bank or the US' Central Intelligence Agency (CIA).
Singapore then went on to tote up a nominal Gross Domestic Product of S$255.5 billion in the 12 months ended September 2008 (in the month the US credit crunch first turned into a full-blown global financial crisis).
In terms of our nominal GDP per capita, as of 2007, we're now anywhere among the world's 19th - 24th richest people.
On a purchasing power basis, our economic achievement is incredibly impressive.
Depending on which international monitoring agency you choose to rely on, we're now either the world's 3rd (World Bank), 5th (IMF) or 6th (CIA) richest people - definitely well ahead of our financially-beleaguered American friends.
Our strong dollar
And oh, what a volatile year for currencies it has been.
And yet, ironically, we're now roughly back to Square One vis-a-vis major reserve currencies like the US dollar and the euro as well as vis-a-vis the Malaysian ringgit.
Back on 1 Jan, for instance, S$100 could be exchanged for US$69.01.
By yesterday afternoon, the same S$100 could still be swapped for almost the same amount of greenback - that is, US$69.36, to be exact.
Vis-a-vis major Asian currencies like the Japanese yen and the Chinese yuan, however, we've weakened somewhat.
For instance, the money-changer at the mall will now give you only 6,263 yen for your $100 as compared to 7,756 a year ago - down by nearly 20 per cent.
But vis-a-vis currencies like the Australia dollar and the New Zealand dollar, we've seen our purchasing power grown much, much stronger.
A year ago, for example, S$100 could get you only A$79.43 in exchange. By yesterday, however, the same S$100 was worth A$100.56. That translates into a hefty currency appreciation of 26.6 per cent in less than a year!
Overall, however, much to the relief of many traders, the Singapore dollar remains fairly stable vis-a-vis a trade-weighted basket of reference currencies.
Our bulging reserves
Back at the end of 2006, barely two years ago, our official foreign reserves already totalled a humongous S$209 billion.
It is still growing, albeit at a slower pace in recent months (mainly because of the global financial crisis).By end-October, however, our reserves stood at around S$241 billion.
This money will surely come in handy to help us weather the bad economic storm that's still brewing in 2009 and beyond.
In fact, a good chunk of this money has already been set aside to guarantee all regular deposits in our local banking system, thus allowing Singaporeans like you and I to avoid the kind of panic that has engulfed savers in many other countries.
In short, sleep tight, my friend, knowing that all is still well with Singapore.
Source: The New Paper, Wed 31 Dec 2008
By Zhen Ming
THIS year has been one filled with sob stories - from everyday investors who have seen their life savings shrink to some others losing their jobs.
(I know of an over-leveraged friend who could soon lose his home.)
But in every downturn, there'll also be winners and what has happened in 2008 is no exception.
So here's my take on how Singapore, as a people, has weathered 2008's financial firestorm:
Our resilient economy
As of last year, Singapore was the world's 44th or 45th largest economy, depending on whether you wish to rely on comparative data provided by the International Monetary Fund (IMF), the World Bank or the US' Central Intelligence Agency (CIA).
Singapore then went on to tote up a nominal Gross Domestic Product of S$255.5 billion in the 12 months ended September 2008 (in the month the US credit crunch first turned into a full-blown global financial crisis).
In terms of our nominal GDP per capita, as of 2007, we're now anywhere among the world's 19th - 24th richest people.
On a purchasing power basis, our economic achievement is incredibly impressive.
Depending on which international monitoring agency you choose to rely on, we're now either the world's 3rd (World Bank), 5th (IMF) or 6th (CIA) richest people - definitely well ahead of our financially-beleaguered American friends.
Our strong dollar
And oh, what a volatile year for currencies it has been.
And yet, ironically, we're now roughly back to Square One vis-a-vis major reserve currencies like the US dollar and the euro as well as vis-a-vis the Malaysian ringgit.
Back on 1 Jan, for instance, S$100 could be exchanged for US$69.01.
By yesterday afternoon, the same S$100 could still be swapped for almost the same amount of greenback - that is, US$69.36, to be exact.
Vis-a-vis major Asian currencies like the Japanese yen and the Chinese yuan, however, we've weakened somewhat.
For instance, the money-changer at the mall will now give you only 6,263 yen for your $100 as compared to 7,756 a year ago - down by nearly 20 per cent.
But vis-a-vis currencies like the Australia dollar and the New Zealand dollar, we've seen our purchasing power grown much, much stronger.
A year ago, for example, S$100 could get you only A$79.43 in exchange. By yesterday, however, the same S$100 was worth A$100.56. That translates into a hefty currency appreciation of 26.6 per cent in less than a year!
Overall, however, much to the relief of many traders, the Singapore dollar remains fairly stable vis-a-vis a trade-weighted basket of reference currencies.
Our bulging reserves
Back at the end of 2006, barely two years ago, our official foreign reserves already totalled a humongous S$209 billion.
It is still growing, albeit at a slower pace in recent months (mainly because of the global financial crisis).By end-October, however, our reserves stood at around S$241 billion.
This money will surely come in handy to help us weather the bad economic storm that's still brewing in 2009 and beyond.
In fact, a good chunk of this money has already been set aside to guarantee all regular deposits in our local banking system, thus allowing Singaporeans like you and I to avoid the kind of panic that has engulfed savers in many other countries.
In short, sleep tight, my friend, knowing that all is still well with Singapore.
Source: The New Paper, Wed 31 Dec 2008
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