Singapore has announced aid for its domestic businesses and workers amid the coronavirus outbreak, as economic unease deepens from a disease that has already contributed to falling stock markets, shuttered businesses, and created a supply chain disorder around the region.
The island state said Saturday it would use government funds to help businesses cover their cash flow needs and pay wages as the coronavirus spreads from China and hits economies across Asia.
Singapore will support tourism and transport businesses, the industries “most intensely” affected by the outbreak, but will consider aid in case of a “knock-on impact on related industries,” the Ministry of Finance and the Ministry of Trade and Industry said in a joint press release.
Stock markets down
Chinese markets fell as much as 9% when they opened for trading Monday for the first time since the Lunar New Year, with smaller declines in the stock markets of nearby Japan, Australia, and Singapore.
The Southeast Asian nation relies on cross border trade, of both financial and physical products, for much of its economy. It is also a common site for international conferences. However, the coronavirus has been spreading for more than a month, leading businesses to close stores, as well as cancel flights, events, and hotel bookings around Asia.
"Singaporeans are understandably concerned,” the finance and trade ministries’ statement said, saying the government would announce a dollar amount for its aid package in the annual budget, planned for Feb. 18.
Singapore has reported 18 cases of coronavirus, the most in Southeast Asia after Thailand, while the Philippines reported the first coronavirus death outside China.
At first, nations around the region watched cautiously for possible economic impacts from the outbreak in China, with Apple and Disneyland temporarily not serving customers on the mainland, and many neighboring nations issuing travel bans.
Lengthy dip in supplies
However, as time has passed, it appears that the economic impacts of the virus could be more prolonged. Starbucks, Toyota, Royal Caribbean Cruises, and other businesses have joined the trend and suspended at least some of their operations in China. The state bank has cut interest rates in hopes of supporting the economy. And beyond retail, so many foreign businesses rely on China for their supply chains that the disruption is likely to hit this, too, especially for technology businesses. Electronics businesses like Sharp and Foxconn, a supplier for the iPhone, saw their stocks dip on fears of supply chain interruptions.
Tourism business hit hard
Besides supply chain risks, nations around China worry as the number of Chinese tourists going abroad has plummeted. They usually flock to the Thai island of Phuket during this holiday season, for instance, but without them the local economy could lose an estimated $1.5 billion in revenue, according to the Thai Tourism Ministry.
Singapore, which depends on China for one fifth of its foreign visitors, also saw a big drop in tourism in the wake of the outbreak.
It is one of the top destinations, as well as Hong Kong, Macau, and Taiwan, where the coronavirus could have the biggest dent on tourism, according to Natixis, an investment bank. Natixis economists Alicia Garcia Herrero and Gary Ng analyzed the latest impact as it compares to the economic impact of the 2003 outbreak of SARS.
"[T]he impact of the Novel Coronavirus on Asian and global hospitality will be worse than in the past,” they wrote in a briefing.
Singapore is responding. In addition to the cash aid announced by the finance and trade ministries, the government will waive license fees for hotels, travel agents and tourist guides, as well as subsidized cleaning costs for hotels that accommodate coronavirus patients.
"We know the situation is likely to persist, and recognize we need to move quickly to support the industry and build confidence,” Keith Tan, chief executive of the government Singapore Tourism Board, said.