Good news again for the people in Singapore. Hong Kong, once again, coming in as the white knight to assure the Hong Kong people of its banking strength, has guaranteed all banking deposits for 2 years, putting pressure on Singapore Goverment to match the move, so as to retain its competitiveness in Asia. Without Hong Kong's move, it is highly unlikely any positive move be made, except, maybe, raising more tariffs (more details here). This will mean the current guarantee for banking deposits for Singapore banks may be raised to match Hong Kong's (Currently, Singapore deposits are guaranteed to only a paltry $20,000). More non partisan details can be obtained at nytimes.com.
Hong Kong is deemed to be a direct competitor in terms of attracting foreign investments from other parts of the world, due to their close proximity, good governance and excellent infrastructure. As such, Hong Kong would be Singapore's closest competitor in terms of fighting for a bigger pie of the financial inflows from the rest of the world.
In future posts, we will talk in detail about Singapore's future. Singapore has no natural resources, no land, no nothing, only people. Singapore's future can only be sustained for another few decades at most, propped up by the incoming integrated resorts. We have come a long way from a small fishing settlement, to manufacturing base to financial hub. With the financial turmoil still not yet fully over, our integrated resorts may not take off, as the success of Singapore's future depends on tourism & domestic consumption, which is why if you noticed Singapore is getting more and more crowded, be it in the trains, the walkway, the CTE or Orchard road. This is because Singapore needs the population to prosper. Take away the tourists, reduce the immigrants and Singapore will be in recession. We will discuss this in future posts and what lies ahead for Singapore's next generation and how to prepare ourselves for it.
Your humble servant.