Some Sensible, and some not so, Reports in The Straits Times
There have been some sensible writeups, surprisingly so, in The Straits Times the last two days.
- The currency war that the world has been witness to since oil and commodity prices started dipping – a Bloomberg report
- US stocks ripe for the picking, by Grace Leong, with insights into the sectors that investors can consider in the light of the recent correction
- Paying the price of closing Singapore’s gates, by Warren Fernandez, where the writer makes a strong pitch for the country to adopt liberal immigration policies
Silent Killer: Today’s report quotes a former IMF economist, David Woo, as saying that the currency war is a silent killer.
Mr Woo, who is Head of Global Rates and Currencies Research at the Bank of America Merrill Lynch in New York, says forex volatility threaten to undermine the global economy more than some realise.
As someone involved in forex trading myself, I can say that there are wild fluctuations in certain currency pairs (USD/Euro, USD/JPY, USD/GBP, USD/AUD, etc) on a daily basis.
Role for Singapore: In the report published yesterday, a Swiss expert explains how a currency war could scuttle long-term economic growth globally.
Cutting interest rates inevitably leads to cheaper currencies and a stronger US dollar. This easy option to deal with trade challenges posed by neighbouring economies has been latched onto by a few dozen countries, including Taiwan, China, South Korea and Australia in recent weeks.
Singapore became the latest to jump on the bandwagon on January 29 when the Monetary Authority of Singapore acted to stem any appreciation of its currency. This triggered a fall in the Singapore dollar, which had already been sliding the last few months, bringing it to a near five-year low against the US dollar.
Deflation Threat: The intent was to tackle the threat of deflation, but Prof Didier Cossin from Switzerland’s School of Business has argued that it might not result in high-quality growth in productivity.
Prof Cossin has suggested, according to yesterday’s report in The Straits Times, that Singapore could lead coordination among nations to prevent currency wars from taking a toll on long-term economic growth.
Interestingly, Switzerland recently decided to remove the pegging of the Swiss Franc to the Euro, resulting in its currency appreciating by more than 30%.
Singapore Immigration: The newspaper has been untiringly carrying pieces on how there is a lack of adequate professional talent in Singapore and how businesses are having trouble hiring people from overseas because of a rigid immigration policy.
In today’s report, Warren Fernandez relates an anecdote whereby while having dinner with a Swiss friend in Davos he figured how anti-immigrant sentiments were driving the latter to relocate his media and events business (oh, what a cutting-edge and innovative industry!) to another country.
- Switzerland has a population of 8.2 million people, with about 23% of them being foreigners. Its land area is put at 41,285 sq.km
- Singapore has a population of around 5.5 million, with 3.35 million citizens in an area of around 718.3 sq.km. Foreigners thus make up almost 40%.
The above data should establish that Singapore has been very liberal with its immigration policy.
G Joslin Vethakumar