Singapore — The severe smog over Singapore caused by forest fires
in Indonesia could hurt the city-state's economy if it persists for
weeks, economists said Friday as the pollution index hit new record
levels.
Tourist spots are shutting down,
companies are allowing staff to work from home and a VIP airport has
suspended operations. Some Singapore restaurants were almost deserted
during the normally busy Friday lunch period.
As
thick gray smoke and the acrid smell of burning wood and grass
smothered the city-state for a fifth day running, economists said
tourism in particular could suffer from Singapore's worst environmental
emergency since the 1997 haze crisis.
Singapore
Prime Minister Lee Hsien Loong said Thursday that the problem "can
easily last for several weeks, and quite possibly longer until the dry
season ends in Sumatra".
The season lasts from June to September.
"The impact on Singapore from the Indonesian haze is particularly
severe this year, and could become worse than 1997," said Rajiv Biswas,
Asia Pacific chief economist at research firm IHS Global Insight.
"If the haze persists over the coming weeks during the seasonal
slash-and-burn period in Sumatra, it has the potential to have
significant negative effects on the Singapore economy.
"Images of the haze enveloping Singapore are being widely reported on
TV channels and other media globally, and can be particularly damaging
to Singapore's world-class tourism industry."
Tourism is a revenue-spinner for Singapore, a tiny city-state that has
designed itself as a regional hub for everything from hosting
conventions to managing the wealth of the world's millionaires.
Singapore welcomed 14.4 million visitors last year who generated Sg$23
billion ($18 billion) in tourism-related revenues. The sector
contributed 4.0 percent directly to the gross domestic product (GDP).
"If the number of tourist visitors fall sharply even for several
months, this will hurt Singapore's GDP numbers for the third quarter of
2013," Biswas said.
He noted that such a decline
would come at a time when Singapore's manufacturing sector, a
traditional pillar of the trade-driven economy, is hurting from weak
orders, particularly for electronics products, from its main markets the
United States and Europe.
"It's a bit of a
disappointment that you can't really see the towers or the buildings.
And it's a bit dark," said 26-year-old British tourist Amy Jones,
referring to Singapore's famous Marina Bay Sands casino complex which
looks like a curved ocean liner perched on three hotel towers over 50
stories high.
Jit Soon Lim, head of equity
research for Southeast Asia at Nomura Singapore Ltd, said domestic
consumption will also suffer as residents stay indoors.
Singapore's GDP is expected to grow between 1 and 3 percent this year, according to official forecasts.
The Pollutants Standards Index rose to an all-time high of 401 at
midday Friday, a level deemed as potentially life-threatening to ill and
elderly persons if it persists over a 24-hour period.
Wild Wild Wet, a popular aquatic park in the island's eastern suburbs,
was shut down along with the Singapore Flyer, the world's biggest Ferris
wheel.
Jurong Bird Park was open but outdoor shows have been canceled.
Starlet Airport, which services the private jets of VIP guests, was
also closed "as a result of prolonged poor visibility caused by the
haze," authorities said.
The main Changi Airport remains operational.
Non-essential employees at Malaysian bank CIMB were allowed to work
from home and staff were given N95 masks, which block out 95 percent of
airborne particles larger than 0.3 microns, said the lender's regional
economist Song Seng Wun.
But one sector is a
direct beneficiary of the haze problem—surgical masks are in short
supply because people have been buying them in great numbers from
pharmacies.
Southeast Asia's worst haze crisis
took place in 1997-1998, causing widespread health problems and costing
the regional economy billions of dollars as a result of business and air
transport disruptions. — Agence France-Presse
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