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

    Hope Remains for Rio Olympic Games

    Facing a host of problems, Rio prepares for holding the games but experts say some risks, like Zika, may not be as grave as initially thought

    IS Use of Social Media to Recruit, Radicalize Still a Top Threat to US

    Despite military gains against IS in Iraq and Syria, their internet propaganda still commands an audience; US officials see 'the most complex challenge that the federal government and industry face'

    ‘Time Is Now’ to Save Africa’s Animals From Poachers, Activist Says

    During Zimbabwe visit, African Wildlife Foundation President Kaddu Sebunya says poaching hurts Africa as slave trade once did

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Ivorian Chocolate Makers Promote Locally-made Chocolatei
    X
    July 29, 2016 4:02 PM
    Ivory Coast is the world's top producer of cocoa but hardly any of it is processed into chocolate there. Instead, the cocoa is sent abroad to chocolate makers in Europe and elsewhere. This is a general problem throughout Africa – massive exports of raw materials but few finished goods. As Emilie Iob reports from Abidjan, several Ivorian entrepreneurs are working to change that formula - 100 percent Ivorian chocolate bar at a time.
    Video

    Video Ivorian Chocolate Makers Promote Locally-made Chocolate

    Ivory Coast is the world's top producer of cocoa but hardly any of it is processed into chocolate there. Instead, the cocoa is sent abroad to chocolate makers in Europe and elsewhere. This is a general problem throughout Africa – massive exports of raw materials but few finished goods. As Emilie Iob reports from Abidjan, several Ivorian entrepreneurs are working to change that formula - 100 percent Ivorian chocolate bar at a time.
    Video

    Video Tesla Opens Battery-Producing Gigafactory

    Two years after starting to produce electric cars, U.S. car maker Tesla Motors has opened the first part of its huge battery manufacturing plant, which will eventually cover more than a square kilometer. Situated close to Reno, Nevada, the so-called Gigafactory will eventually produce more lithium-ion batteries than were made worldwide in 2013. VOA's George Putic reports.
    Video

    Video Polio-affected Afghan Student Fulfilling Her Dreams in America

    Afghanistan is one of only two countries in the world where children still get infected by polio. The other is Pakistan. Mahbooba Akhtarzada who is from Afghanistan, was disabled by polio, but has managed to overcome the obstacles caused by this crippling disease. VOA's Zheela Nasari caught up with Akhtarzada and brings us this report narrated by Bronwyn Benito.
    Video

    Video Hillary Clinton Promises to Build a 'Better Tomorrow'

    Democratic presidential candidate Hillary Clinton urged voters Thursday not to give in to the politics of fear. She vowed to unite the country and move it forward if elected in November. Clinton formally accepted the Democratic Party's nomination at its national convention in Philadelphia. VOA national correspondent Jim Malone has more.
    Video

    Video Trump Tones Down Praise for Russia

    Republican presidential candidate Donald Trump is toning down his compliments for Russia and Vladimir Putin as such rhetoric got him in trouble recently. After calling on Russia to find 30.000 missing emails from rival Hillary Clinton, Trump told reporters he doesn't know Putin and never called him a great leader, just one who's better than President Barack Obama. Putin has welcomed Trump's overtures, but, as Zlatica Hoke reports, ordinary Russians say they are not putting much faith in Trump.
    Video

    Video Uganda Unveils its First Solar-powered Bus

    A solar-powered bus described by its Ugandan makers as the first in Africa has made its public debut. Kiira Motors' electric bus, Kayoola, displayed recently at a stadium in Uganda's capital. From Kampala, Maurice Magorane filed this report narrated by Salem Solomon.
    Video

    Video Silicon Valley: More Than A Place, It's a Culture

    Silicon Valley is a technology powerhouse and a place that companies such as Google, Facebook and Apple call home. It is a region in northern California that stretches from San Francisco to San Jose. But, more than that, it's known for its startup culture. VOA's Elizabeth Lee went inside one company to find out what it's like to work in a startup.
    Video

    Video Immigrant Delegate Marvels at Democratic Process

    It’s been a bitter and divisive election season – but first time Indian-American delegate Dr. Shashi Gupta headed to the Democratic National Convention with a sense of hope. VOA’s Katherine Gypson followed this immigrant with the love of U.S. politics all the way to Philadelphia.
    Video

    Video Dutch Entrepreneurs Turn Rainwater Into Beer

    June has been recorded as one of the wettest months in more than a century in many parts of Europe. To a group of entrepreneurs in Amsterdam the rain came as a blessing, as they used the extra water to brew beer. Serginho Roosblad has more to the story.
    Video

    Video Commerce Thrives on US-Mexico Border

    At the Democratic Convention in Philadelphia this week, the party’s presumptive presidential nominee, Hillary Clinton, is expected to attack proposals made by her opponent, Republican presidential nominee Donald Trump, to build a wall along the U.S.-Mexico border. Last Friday, President Barack Obama hosted his Mexican counterpart, President Enrique Peña Nieto, to underscore the good relations between the two countries. VOA’s Greg Flakus reports from Tucson.
    Video

    Video Film Helps Save Ethiopian Children Thought to be Cursed

    'Omo Child' looks at effort of African man to stop killings of ‘mingi’ children
    Video

    Video London’s Financial Crown at Risk as Rivals Eye Brexit Opportunities

    By most measures, London rivals New York as the only true global financial center. But Britain’s vote to leave the European Union – so-called ‘Brexit’ – means the city could lose its right to sell services tariff-free across the bloc, risking its position as Europe’s financial headquarters. Already some banks have said they may shift operations to the mainland. Henry Ridgwell reports from London.

    Special Report

    Adrift The Invisible African Diaspora

    World Currencies

    EUR
    USD
    0.8998
    JPY
    USD
    103.32
    GBP
    USD
    0.7594
    CAD
    USD
    1.3176
    INR
    USD
    66.954

    Rates may not be current.