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

UN: 1 Million Somalis at Risk of Hunger

Group warns region is in dire need of humanitarian aid, with at least 200,000 children under age of five acutely malnourished as drought hits southern, central part of nation More

Human Rights Groups Allege Supression of Freedoms in Thailand

Thailand’s military, police have suppressed release of independent report assessing human rights in kingdom during first 100 days of latest coup More

Jennifer Lawrence Contacts FBI After Nude Photos Hacked

'Silver Linings Playbook' actress' photos were posted on image-sharing forum 4chan; Federal Bureau of Investigations is looking into matter More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Ukraine Schools Resume Classes, Donate to Government Forcesi
X
September 02, 2014 12:58 PM
A new school year has started in Ukraine but thousands of children in the war-torn east are unable to attend because of ongoing clashes with pro-Russia rebels. In Ukraine's capital, patriotic education has become the norm along with donations to support injured security forces fighting to take back rebel-held areas. VOA's Daniel Schearf reports from Kyiv.
Video

Video Ukraine Schools Resume Classes, Donate to Government Forces

A new school year has started in Ukraine but thousands of children in the war-torn east are unable to attend because of ongoing clashes with pro-Russia rebels. In Ukraine's capital, patriotic education has become the norm along with donations to support injured security forces fighting to take back rebel-held areas. VOA's Daniel Schearf reports from Kyiv.
Video

Video US Detainees Want Negotiators for Freedom in North Korea

The three U.S. detainees held in North Korea were permitted to speak with foreign media Monday. The government of Kim Jong Un restricted the topics of the questions, and the interviews in Pyongyang were limited to five minutes. Each of the men asked Washington to send a representative to Pyongyang to secure his release. VOA’s Carolyn Presutti has our story.
Video

Video Internet, Technology Offer New Tools for Journalists

The Internet and rapidly evolving technology is quickly changing how people receive news and how journalists deliver it. There are now more ways to tell a story than ever before. One school in Los Angeles is teaching the next generation of journalists with the help of a state-of-the-art newsroom. Elizabeth Lee has this report.
Video

Video Turkmen From Amerli Describe Survival of IS Siege

Over the past few weeks, hundreds of Shi'ite Turkmen have fled the town of Amerli seeking refuge in the northern city of Kirkuk. Despite recent military gains after U.S. airstrikes that were coordinated with Iraqi and Kurdish forces, the situation remains dire for Amerli’s residents. Sebastian Meyer went to Kirkuk for VOA to speak to those who managed to escape.
Video

Video West Africa Ebola Vaccine Trials Possible by Early 2015

A U.S. health agency is speeding up clinical trials of a possible vaccine against the deadly Ebola virus that so far has killed more than 1,500 people in West Africa. If successful, the next step would be a larger trial in countries where the outbreak is occurring. VOA's Carol Pearson has more.
Video

Video Survivors Commemorate 70th Anniversary of Nazi Liquidation of Jewish Ghetto

When the German Nazi army occupied the Polish city of Lodz in 1939, it marked the beginning of a long nightmare for the Jewish community that once made up one third of the population. Roughly 200,000 people were forced into the Lodz Ghetto. Less than 7,000 survived. As VOA’s Kane Farabaugh reports, some survivors gathered at the Union League Club in Chicago on the 70th anniversary of the liquidation of the Lodz Ghetto to remember those who suffered at the hands of the Nazi regime.
Video

Video Cost to Raise Child in US Continues to Rise

The cost of raising a child in the United States continues to rise. In its latest annual report, the U.S. Department of Agriculture says middle income families with a child born in 2013 can expect to spend more than $240,000 before that child turns 18. And sending that child to college more than doubles that amount. VOA’s Deborah Block visited with a couple with one child in Alexandria, Virginia, to learn if the report reflects their lifestyle.
Video

Video Chaotic Afghan Vote Recount Threatens Nation’s Future

Afghanistan’s troubled presidential election continues to be rocked by turmoil as an audit of the ballots drags on. The U.N. says the recount will not be completed before September 10. Observers say repeated disputes and delays are threatening the orderly transfer of power and could have dangerous consequences. VOA correspondent Meredith Buel reports.

AppleAndroid

World Currencies

EUR
USD
0.7537
JPY
USD
103.79
GBP
USD
0.6032
CAD
USD
1.0957
INR
USD
60.522

Rates may not be current.