The number of confirmed coronavirus infections in Singapore reached 243 on March 16. After identifying local coronavirus cases unrelated to previous cases or with people with a history of travel to China, Singapore raised the new coronavirus risk assessment from DORSCON Yellow to DORSCON Orange, on February 7.
Disease Outbreak Response System Condition (DORSCON) applied by Singapore shows that the disease situation is common at four levels – the lowest is Green (level 1) and the highest is Red (level 4). Orange, being the third level, only lacks one level of Red. Let’s find out how the Singapore government is prepared to cope with the effects of Covid-19.
The impact of Covid-19 on Singapore will last at least one year
In an interview with CNBC Asia on March 11, Foreign Minister Vivian Balakrishnan said that Covid-19 was not the same as during the severe acute respiratory syndrome (SARS) outbreak in 2003. It would last at least one year, which means that governments must take long-term, sustainable and rational action.
Firstly, the immediate response of fear has caused a collapse for industries such as tourism, aviation, and retail. The next thing will impact on supply chains and energy.
In addition to the current challenges of containing the virus in the coming months, he said the government is considering how to move forward next year, including how to reboot the economy.
So far, Singapore has had a zero mortality rate, but Dr. Balakrishnan has resisted assuming that it will certainly stay the same. However, he spoke to front-line doctors, who shared that Singapore’s healthcare system has the resources, staff, and equipment needed to handle current challenges.
He also encourages all Singaporeans to e-Register their trips so it will be easier to contact them when needed.
Besides Singapore’s healthcare and economy, he believes that coronavirus is also a test of our social capital as a country and we are committed to not leaving any Singaporean behind.
He added that a strong economy is very important for health care because it ensures that a country has the resources it needs to spend on health care.
A significant impact potentially in a prolonged fashion
In an interview with CNBC’s “Squawk Box Asia”, Lawrence Wong – Singapore’s minister of national development, told that the Singapore government was dealing with a twin crisis at an unprecedented rate: One, a public health emergency; Second, an economic crisis.
An economic crisis will be more serious than anything we’ve ever seen in modern history – said Mr. Wong, who is also the second minister of finance and co-chair of a multi-ministry task force to fight COVID-19.
Singapore, a Southeast Asian country with a population of about 5.7 million, is one of the earliest people outside of China to report new cases of coronavirus infection. However, this country hasn’t reported any deaths.
As a commercially dependent economy and a major aviation center, Singapore is expected to be severely affected by the coronavirus outbreak. Last month, the government lowered its forecast range for the change in the Gross Domestic Product from -0.5% to 1.5% this year – worse than the previous growth forecast of 0.5% to 2.5%.
With the virus spreading to more countries in the past month and showing signs of mitigation, the Singaporean government is preparing a second stimulus package to support its economy. These are S$ 5.6 billion (US$ 3.92 billion) of additional measures announced last month to help businesses and households cope with the disease.
“We’re looking at a second package because we recognize that given what we’re facing today, there will be significant impact not just in the near term, but potentially in a prolonged fashion”, said Mr.Wong.
The most vulnerable field in Southeast Asia to COVID-19 impact
Singaporean banks are amongst the areas expected to be hardest hit by the COVID-19 outbreak, along with Thailand, Fitch Ranking (an American credit rating agency and one of the “Big Three credit rating agencies”) said in a note.
The direct contact of Singapore banks with China, which is larger, on average 24% of gross loans, is a potential stress area. On the other hand, local banks exposed to China mainly include low-risk assets, including loans to leading corporations, short-term commercial loans or liquidity with major Chinese banks. But the slowdown in economic activity will still test the resilience of Singapore banks.
The announced relief measures will also ease pressure on asset quality and profitability in the short term. These measures include a 6 to 12-month on Small and Medium Enterprise property loans and some retail mortgage loans.