With new Covid-19 infections running to thousands each day, the path forward for Singapore is increasingly one that distinguishes between the vaccinated and those who decline the shots. Signs promote $S30 ($22) vouchers for folks who refer seniors for the vaccine — they’re a vulnerable demographic and ministers are constantly urging them get protection. Need a bit of extra spending money for the weekend? Get grandma to the clinic.
Another important signal came Thursday from the Monetary Authority of Singapore, which unexpectedly tightened monetary policy. By slightly raising the slope of the local currency’s trading band, MAS is acknowledging inflationary impulses. “External and domestic cost pressures are accumulating, reflecting both normalizing demand as well as tight supply conditions,” the central bank said in a statement. In worrying about inflation, MAS is clearly in the global mainstream. Interest rates are rising in New Zealand and South Korea, while the Federal Reserve, Bank of England and Reserve Bank of India are signaling withdrawal of accommodation.
Like the world economy, for which Singapore is considered an avatar because of its status as a hub for finance and trade, the republic will do pretty well this year. Gross domestic product increased 6.5% in the third quarter from a year earlier. The central bank sees growth “likely to remain above trend in the quarters ahead.”
This is no guarantee of future performance. This year’s carousel of openings and closings has chipped away at confidence. In 2021, stimulus from the large economies has lifted pretty much every boat. As the recovery eases, the trade-offs between minimizing Covid infections and economic growth get harder. Tougher choices need to be weighed. For Singapore, this means lining up unambiguously behind re-opening, a point made in a national address Saturday by Prime Minister Lee Hsien Loong. The city-state can’t stay “locked down and closed off indefinitely,” Lee said. “We need to update our mindsets. We should respect Covid-19, but we must not be paralyzed by fear.”
To the government’s credit, it hasn’t returned to lockdown even as daily cases and deaths climbed recently. There have been a couple of false dawns, though, where the government declared the need to live with Covid, only to blink when infections spiked. With a vaccination rate in excess of 80%, the key to staying open — even in an abbreviated manner — appears to be highlighting the mobility that jabs give you. Proof of vaccination will also be required for entry to malls. Vaccinated travel lanes have been approved to a group of countries, including the U.S. and U.K., that allow travelers to avoid quarantine upon arrival in Singapore.
Just like the re-opening and the fight against the virus, the new measures are proceeding in fits and starts. I visited five hawker centers on Wednesday. At only one did an attendant at the front ask to see my proof of vaccination. Not a single stall worker asked for my status, nor did I see anyone seek to enforce the rules. Consistency is going to be a challenge, but what matters is the overall trajectory.
Despite a lot of wavering and mixed signals the past few months, this week feels like something has changed. Anyone with an interest in the flow of capital and talent will be hoping this re-opening, however patchy and gradual, can hold.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Daniel Moss is a Bloomberg Opinion columnist covering Asian economies. Previously he was executive editor of Bloomberg News for global economics, and has led teams in Asia, Europe and North America.
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