10 February 2009

Your Money or Your Lifestyle

The cures for the ailing global economy are as abundant as the number of economists in the world. While financial professionals think globally, we all have to live the crisis locally. In Singapore, the government’s recovery plan recommends citizens to save money. Those in charge believe that the 4 million populous (1 million of which are expats) cannot spend their way out of the economic slump. They think that the domestic buying power is not large enough to lift the economy and offset falling exports. Therefore, the nation is to be prudent and not live lavishly. Among other things the government suggests, each person should take shorter showers, eat more vegetables, and keep from buying high-end mobile phones.

As my sister Valerie says, “I ain’t no math whiz. I’m a cheese whiz.” I am in no position to make any predictions of what saving money rather than spending money will do to the country’s economy. Singapore’s trade and industry are things I know nothing, but after two months I do know one thing: shopping is the unofficial national pastime.

The pledge of the people is a promise to shop and spend. The average cost of a compact car is S$80,000, but fees, taxes, and a Certificate of Entitlement drive the costs well into S$100,000. In a country 3x the size of Washington D.C. there are anywhere from 185 -250 multilevel malls. I cannot find an official count, but on Orchard Road, a 3-mile district of premier retailers similar to NYC’s Fifth Avenue, I counted 28 malls. Each retail centre has several floors full of shops, spas, and restaurants. On the corner of the main intersection of Orchard Road and Scotts Road, a new shopping mall will open for business in 2010.

Off Orchard Road, a “lifestyle” residential tower is under construction. Developers, Hayden Properties, are creating the world’s largest apartment building with connected car porches. The Hamilton Scotts will have an elevator that lifts the car up to the unit. As part of the design, the parked cars next to each condominium form a column along the building. From the street people will be able to see a car column behind a panel of glass. The 54 units are roughly 2,700 sq ft each and cost over S$4,000 sq. ft. Move in date is 2011.

The spending continues. In 2005, Prime Minister Lee Hsien Loong lifted a decade’s old ban on gambling and gave approval to build two casinos. At that time he said, “We want Singapore to have that x-factor.” He felt the country was at risk of becoming a “backwater”. One casino, owned by a Malaysian company, will be part of the resort island, Sentosa where Universal Studios is building a theme park. Rides roll in 2012. Until then, you can place your bets at The Sands casino this July.

According to the Singapore Tourism Board, 2008 saw good returns. Even though Singapore welcomed only 10.1 million visitors, a small decline of 1.6% from 2007, it did post record-breaking receipts of S$14.8 billion (9.8 billion U.S.), an increase of 4.8%. Room revenue in hotels booked S$2.1 billion (1.4 billion U.S.), a 12.1% growth over last year.

Perhaps the government expects visitors and tourists to spend Singapore out of a slump. If The Singapore Flyer is any indication, then that plan might fall flat. Opened last year and billed as a world-class visitor attraction, the tallest Ferris wheel in the world has 28 cars with 360° views of the city. Each car holds 32 people. On 23 December 2008, 173 passengers on the Flyer were trapped for six hours as a result from an electrical fire - giving a new meaning to the phrase money trap. The owners are not only under government investigation, but they owe tens of thousands of dollars in back rent. It reopened last month on the 25th. Attendance is down even though they dropped the admission to S$30 per person.

Until the spending freeze ends, it looks as if it is up to the tourists to keep Singapore’s economy spinning. I can see the slogan now: Singapore: You Cane Bet on It!

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