Daily Lesson from Life 25 January 2009

Channel NewsAsia - Sunday, January 25

SINGAPORE : The Year of the Ox will be a challenging one for Singapore — with growth expected to be negative for the whole year.


But calling on Singaporeans not to be despondent, Prime Minister Lee Hsien Loong, in his Lunar New Year message, said the country has the strengths to outlast this recession.

And for all the government is doing — as seen in the just unveiled S$20.5 billion Budget — Mr Lee also called on community and family to pull together to weather the crisis.


A recent OCBC survey found that the top three Singaporean dreams this year were starting a family, settling down, and buying a home. In contrast, just last year, the top three dreams were seeing the world, self—improvement and making money.

Mr Lee said this highlighted how priorities have shifted.


Calling the family the most important life raft in times of crisis, Mr Lee said this festive period is a time for togetherness, including extended families. Community efforts are another important bedrock.

With community organisations coming up with innovative ways to help residents, the government will also increase funding to such groups and increase tax deductions, as announced in the Budget.


Mr Lee also explained the need to dip into the country’s reserves. Calling it a major, carefully—thought out decision, he said the money was built up patiently over the years so that in the event of a crisis, like this current financial meltdown, a vigorous response could be mounted.

But he cautioned that when things returned to normal, the habit of putting something aside in the reserves whenever possible must resume, so that the next crisis can be met with confidence.


While all these measures will help mitigate the downturn, Mr Lee said it cannot lift the economy from recession as this is a global problem. He added that Singaporeans can expect growth to remain negative for more months and perhaps even the whole year.

However, Mr Lee said Singapore’s basic strengths of a stable society and good reputation can be built upon for the country to emerge stronger from this period."

Lessons for me are:

1. there are good times and there are bad bad times! If we live in an urbane society, we need to have some money to survive. We can survive on very little money if we are creative and careful. Of course there are some must have expenditures like foods, lodging, clothes, education, health care, and transportation. The rest are optional really! Not a glamorous living but ordinary. If we have some leftover, we need to save and invest if we have some more leftover!;

2. while PM Lee speaks about coming together to weather the storm and stick together as one, it is getting more and more difficult when the ordinary people viewed the 'million dollar pay package' of top civil servants and ministers as 'excessive', despite painful explanation by the government on why there is a need to continue to 'pay talent to prevent corruption'! This is where a leader has to be careful. While we do not want leader to just make decision to 'please' the people, it is worth noting that the restlessness and discontent on this issue, in the light of the deteriorating economic performance and some 'mis-steps in investing lately', were nonetheless real!;

3. Singapore's reserve is strong. The S$5B taken out this fiscal year is no big deal IF we can pull out of the recession and save jobs. However, there is still the fundamental issue of: is it still reasonable and valid to expect US consumers, who were all down on their kneels due to the burden of over-consuming in the past on credit, to start consuming again soon? I don't think so UNLESS President Obama failed to see that the root of all evil in this financial tsunami was, still is, over-consuming on credit!

I see tougher time ahead in the next 6-12 months. It is great that USA is the only country that can continue to print money without it's value decreasing. BUT somehow someone has to pay for all these NEWLY PRINTED hundred of billions of dollar! China WILL not be able to continue buying US treasury note as it's export dwindled since USA is the largest consumer of it's export! The Growth Model is broken. We need to find a NEW model quickly!

My take is that it will be one of: responsible consumption with lower growth rate in quantity but hopefully with an increase in quality of life!

Happy Chinese Lunar New Year of the Ox!!