News / Economy

Singapore, Malaysia Face Economic Hit from Prolonged Smog

Tourists visit a sightseeing spot as the Marina Bay Sands Hotel in the background is shrouded with haze in Singapore, June 22, 2013.
Tourists visit a sightseeing spot as the Marina Bay Sands Hotel in the background is shrouded with haze in Singapore, June 22, 2013.
Reuters
Singapore and Malaysia could face a bigger economic impact than from their worst air pollution crisis 16 years ago if slash-and-burn fires in Indonesia continue to rage in the coming weeks, turning off tourists and raising business costs.
 
Restaurants, tourist attractions and some other businesses are already feeling the pain as haze envelopes the Southeast Asian neighbors, from Singapore's upscale shopping districts to Malaysia's popular beach resorts.
 
The haze crisis in 1997 lasted about three months and cost Southeast Asia an estimated $9 billion from disruptions to air travel, health expenses and other business impacts. Economists and businesses say the costs are already mounting about a week since air pollution levels in the countries shot up to unhealthy and sometimes hazardous levels.
 
“The haze has definitely affected our business. Our sales fell around 40 percent in the past week,'' said Goo Wai Chien, who sells pizza and pasta at a hawker center in Singapore's business district. “But hopefully the situation is improving.''
 
Much depends on how long the haze lasts and which way the wind blows the smoke that is coming mostly from fires set on palm oil plantations on Indonesia's Sumatra island. Singapore Prime Minister Lee Hsien Loong has said the haze, which eased over the weekend and on Monday in the city state, could last a few weeks or until the dry season ends in Sumatra in September or October.
 
Extinguishing the fires, which smolder deep within peat,  depends almost entirely on levels of rainfall.
 
Irvin Seah, DBS economist in Singapore, said the overall impact could be worse than in 1997 if the haze drags on.
 
“In 1997, the level of pollution was not this severe, and on the other hand the tourism industry's contribution to the economy was relatively smaller back then.''
 
Tourism makes up 6.4 percent of Malaysia's economy and about 5 to 6 percent of Singapore's. Analysts see that sector taking an immediate knock, even if they cannot quantify the damage.
 
“The impact will be negative,'' ANZ, a bank, said in a research report, referring to Singapore. “Shopping, restaurants, bars and outdoor entertainment will all suffer during this hazy period.''
 
Hotels, restaurants and other hospitality businesses also benefit from Singapore's prominence as a center for industry meetings and trade shows.
 
Tourism, health fears
 
Perceptions of Singapore, which usually enjoys clear skies and relatively little pollution, could be the biggest casualty if the smoke hangs over the island through September.
 
A conference this week on global nuclear issues with dozens of high-profile experts, including former U.S. secretary of state George Shultz and former secretary of defense William Perry, was postponed “due to increasingly hazardous weather conditions in Singapore'', the organizers said.
 
“It would create a very negative impression and also deter tourist inflows. It would deter people thinking about moving to work in Singapore,'' said P.K. Basu, regional head of research and economics at Maybank Kim Eng.
 
Brokerage CLSA has estimated the damage to Singapore - a major financial center, aviation hub and tourism destination - could end up being hundreds of millions of dollars. Other analysts said it could top $1 billion.
 
Singapore and its $271 billion economy cannot afford a big hit from a prolonged pollution crisis or any loss of confidence.
 
The economy - which is dominated by services, followed by manufacturing and construction - was stronger than expected in the first quarter due to a surge in the financial sector.
 
But exports have been weak, especially electronics, and economists now expect growth of 2.3 percent this year, slower than the median estimate of 2.8 percent in March, according to the central bank's latest quarterly survey released this month.
 
Francis Tan, an economist at United Overseas Bank, said if the smog in Singapore extends until September, with pollution rising to unhealthy levels from time to time, it could shave 0.3 to 0.5 percentage points off his 2013 growth forecast of 3 percent. That would mean up to $1.2 billion in economic losses.
 
Among the biggest costs that businesses face from the haze is illness.
 
Hospitals and clinics in areas badly affected by haze in recent days had recorded a rise of more than 100 percent in asthma cases, Malaysia's director-general of health Noor Hisham Abdullah was quoted as saying by the Bernama state news agency.
 
Patients reporting other respiratory problems and conjunctivitis had also jumped, he said.
 
The Malaysian capital, Kuala Lumpur, was veiled in thick smog on Monday, a day after parts of the southern state of Johor declared an emergency as pollution readings rose above the hazardous level.
 
Cheah Tuck Wing, the executive director of the Malaysia-Australia Business Council, said companies in Johor - which has attracted growing investment from neighboring Singapore - were already seeing a rise in worker sickness.
 
“People are not well and it will definitely affect production, that goes without saying. It has definitely impacted business, especially factories where a huge number of people are working.''

You May Like

Polls Open in Scotland Independence Vote

As race to persuade undecided voters continues, 'No' voters say they believe life in Scotland will slowly improve, 'Yes' vote not worth the risk More

South Africa’s 'Open Mosque' Admits Everyone, Including Critics

Open Mosque founder plans to welcome gay worshipers and allow women to lead prayers More

Ukrainian Activist in Despair About Future of Her Country

IrIna Dovgan, accused of being a spy and tortured by pro-Russian separatists, is appealing to UN Human Rights Council to support her country More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
A Dinosaur Fit for Land and Wateri
X
September 17, 2014 8:44 PM
Residents and tourists in Washington D.C. can now examine a life-size replica of an unusual dinosaur that lived almost a hundred million years ago in northern Africa. Scientists say studying the behemoth named Spinosaurus helps them better understand how some prehistoric animals adapted to life on land and in water. The Spinosaurus replica is on display at the National Geographic museum. VOA’s George Putic has more.
Video

Video A Dinosaur Fit for Land and Water

Residents and tourists in Washington D.C. can now examine a life-size replica of an unusual dinosaur that lived almost a hundred million years ago in northern Africa. Scientists say studying the behemoth named Spinosaurus helps them better understand how some prehistoric animals adapted to life on land and in water. The Spinosaurus replica is on display at the National Geographic museum. VOA’s George Putic has more.
Video

Video Iraqi Kurdistan Church Helps Christian Children Cope find shelter in churches in the Kurdish capital, Irbil

In the past six weeks, tens of thousands of Iraqi Christians have been forced to flee their homes by Islamic State militants and find shelter in churches in the Kurdish capital, Irbil. Despite U.S. airstrikes in the region, the prospect of people returning home is still very low and concerns are starting to grow over the impact this is having on the displaced youth. Sebastian Meyer reports from Irbil on how one church is coping.
Video

Video NASA Picks Boeing, SpaceX to Carry Astronauts Into Space

The U.S. space agency, NASA, has chosen Boeing and SpaceX companies to build the next generation of spacecraft that will carry U.S. astronauts to the International Space Station by the year 2017. The deal with private industry enables NASA to end its dependence on Russia to send space crews into low Earth orbit and back. Zlatica Hoke has more.
Video

Video Future of Ukrainian Former President's Estate Uncertain

More than six months after Ukraine's former President Viktor Yanukovych fled revolution to Russia, authorities have yet to gain control of his palatial estate. Protesters occupy the grounds and opened it to tourists but they are also refusing to turn it over to the state. VOA's Daniel Schearf reports from Mezhigirya, just north of Kyiv.
Video

Video China Muslims Work to Change Perceptions After Knife Attacks

China says its has sentenced three men to death and one woman to life in prison for a deadly knife attack in March that left more than 30 dead and 140 injured. Beijing says Muslim militants from China's restive western region of Xinjiang carried out the attacks. Now, more than six months after the incident, residents in the city are still coping with the aftermath. VOA's Bill Ide has more from Kunming.
Video

Video Enviropreneur Seeks to Save the Environment, Empower the Community

Lorna Rutto, a former banker, is now an ‘enviropreneur’ - turning plastic waste into furniture and fences discusses the challenges she faces in Africa with raw materials and the environment.
Video

Video West Trades Accusations Over Ransoms

As world leaders try to forge a common response to the threat posed by Islamic State militants in Iraq and Syria, there is simmering tension over differing policies on paying ransoms. In the past month, the jihadist group has beheaded two Americans and one Briton. Both countries refuse to pay ransom money. As Henry Ridgwell reports for VOA from London, there is uncertainty in the approach of some other European nations.
Video

Video Scotland Independence Bid Stokes Global Interest

The people of Scotland are preparing to vote on whether to become independent and break away from the rest of Britain, in a referendum being watched carefully in many other countries. Some see it as a risky experiment; while others hope a successful vote for independence might energize their own separatist demands. Foreign immigrants to Scotland have a front row seat for the vote. VOA’s Henry Ridgwell spoke to some of them in Edinburgh.


Carnage and mayhem are part of daily life in northern Nigeria, the result of a terror campaign by the Islamist group Boko Haram. Fears are growing that Nigeria’s government may not know how to counter it, and may be making things worse. More

AppleAndroid

World Currencies

EUR
USD
0.7718
JPY
USD
107.32
GBP
USD
0.6125
CAD
USD
1.0974
INR
USD
60.919

Rates may not be current.