Today's news

I think this piece just about summarises the problems we've had for the past couple of years in Singapore ...well summarized...

'Growth bottlenecks are being tackled: PM

'I wish we had moved earlier,' he says, on the crunch in office space and high rentals

By Alvin Foo

7May 2008 IN HINDSIGHT, the Government should have moved earlier to alleviate problems in Singapore such as rising rents, a shortage of office space and places in international schools for expatriate children.

But these bottlenecks in the economy will ease in one or two years, said Prime Minister Lee Hsien Loong yesterday, as a fresh supply of office space, apartments and new school facilities comes onstream.

Mr Lee was speaking at a question-and-answer session with 120 business leaders organised by Thomson Reuters. The hour-long dialogue saw him tackle a wide range of issues, including recent problems thrown up by the healthy growth of the financial sector.

'We are running up against constraints because we don't have enough office space, we don't have enough accommodation. I think rentals have gone up. We don't have enough schools for expatriate children.'

Singapore is facing an office-space crunch with no significant new prime office space coming on the market until 2010, when Phase 1 of the new Marina Bay Financial Centre is completed. As a result, office rentals have soared.

'I wish we had moved earlier...I wish we had moved on the financial centre six months earlier than we actually did,' he said.

But he noted that at the time, the market 'looked cold and nobody was interested'.

'Now we're in a different situation and we wish we had done it earlier,' he added.

Nevertheless, he gave the assurance that these constraints are being tackled.

For example, the Government is helping United World College South-east Asia to build a new campus in Tampines. The $300 million school is set to be ready in 2010.

And rents, which he noted are 'a matter of some angst', should come down as homes which are going en bloc and redeveloped are released. 'We can deal with these problems...we're setting in place measures which will see us through.'

Mr Lee also touched on economic risks, cautioning that the extent of the US slowdown was still unknown.

In addition to the growth curve being shaped like an L, U or V, he noted that the recovery in the US economy could even be W-shaped - a scenario in which things get better and then a new problem arises.

But Singapore has the resources to deal with an economic slowdown there, even if it is L-shaped. 'If things do get bad...we're not without recourse because we have the resources, we have the wherewithal.'

One way to stimulate the economy in a downturn is to increase fiscal spending. The Government could, for example, restart construction projects held back because of a shortage of resources in the sector. Some $3 billion in projects have been deferred, including the Health Ministry's National Addiction Management Centre and a section of Changi Prison Complex.

On the Government of Singapore Investment Corporation's (GIC) recent investment in Swiss bank UBS, Mr Lee said: 'There's no strategic purpose... It's made purely on financial merits...We do not have ambitions to control the world.'