Keith Lin, Straits Times 4 Feb 08;
Minister warns that escalating inflation in other parts of the world may cause rapid about-turn in situation here
ALTHOUGH Manpower Minister Ng Eng Hen expects economic growth this year to be between 4.5 and 6.5 per cent, he wants Singaporeans to tighten their belts and cautions them against over-spending.
This is because escalating inflation in other parts of the world could lead to a rapid about-turn in the situation here.
Speaking at a dialogue after a visit to the Keat Hong division of Hong Kah GRC yesterday, Dr Ng said it had become 'quite clear' that living costs had gone up significantly here.
He was responding to a comment from a participant, who said that it was becoming increasingly expensive for low- and middle-income families to eat out.
Putting things in perspective, Dr Ng pointed to the fact that the sparkling economic growth last year had led to a general rise in wages by some 8 per cent. That gave Singaporeans some leeway to deal with the rising living expenses.
The hum of investments generated by projects such as the upcoming integrated resorts will also give Singapore the momentum to deal with short bouts of high inflation, he explained.
But what worried him was that rising costs in other parts of the world, if not dealt with, could spark bigger problems.
'If it's for a discrete period, I think we'll weather it,' he said. 'But whenever this is affecting everyone globally, you may have political disturbances, social consequences and upheavals.'
For example, a protracted spell of bad weather in China has caused the prices of crops there to escalate, forcing the Chinese to look elsewhere for grain supplies. Hence, this exports inflationary pressures.
An anecdote he had heard recently illustrated this point.
Representatives from a major supermarket chain here had gone to Vietnam to seek alternative sources of grain, only to be told by the suppliers there that the Chinese 'have already bought up all the rice'.
Referring to the Chinese zodiac cycle, Dr Ng said: 'The year of the Rat seems to be a bit trickier than the year of the Pig, which was a very prosperous year.'
His advice to Singaporeans: Watch events that occur elsewhere in the world closely and tighten your belts whenever possible.
'Let's band together, look for opportunities, look for ways to approach our problems with confidence,' he said. 'I think if we keep our heads and keep our cool, we will be all right.'
