Singapore and Asia: Impact of the Global Financial Tsunami and Other Economic Issues

222 Pages·2009·2.145 MB·English

by  Sng Hui Ying, Chia Wai Mun

Singap re
Asia
and
Impact of the Global Financial Tsunami
and Other Economic Issues
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Singap re
Asia
and
Impact of the Global Financial Tsunami
and Other Economic Issues
Editors
Sng Hui Ying
Chia Wai Mun
School of Humanities & Social Sciences,
Nanyang Technological University, Singapore
World Scientific
NEW JERSEY • LONDON • SINGAPORE • BEIJING • SHANGHAI • HONG KONG • TAIPEI • CHENNAI
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Published by
World Scientific Publishing Co. Pte. Ltd.
5 Toh Tuck Link, Singapore 596224
USA office: 27 Warren Street, Suite 401-402, Hackensack, NJ 07601
UK office: 57 Shelton Street, Covent Garden, London WC2H 9HE
Library of Congress Cataloging-in-Publication Data
NTU-MOE Seminars (2009 : Singapore)
Singapore and Asia : impact of the global financial tsunami and other economic
issues / editors, Sng Hui Ying, Chia Wai Mun.
p. cm.
Includes bibliographical references and index.
ISBN-13: 978-981-4280-45-7
ISBN-10: 981-4280-45-3
1. Singapore--Economic policy--Congresses. 2. Asia--Economic policy--Congresses.
3. Financial crises--Singapore--Congresses. 4. Financial crises--Asia--Congresses.
5. Global Financial Crisis, 2008–2009. I. Sng, Hui Ying. II. Chia, Wai Mun. III. Title.
HC445.8.N78 2009
330.95957--dc22
2009037583
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library.
Copyright © 2010 by World Scientific Publishing Co. Pte. Ltd.
All rights reserved. This book, or parts thereof, may not be reproduced in any form or by any means,
electronic or mechanical, including photocopying, recording or any information storage and retrieval
system now known or to be invented, without written permission from the Publisher.
For photocopying of material in this volume, please pay a copying fee through the Copyright
Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA. In this case permission to
photocopy is not required from the publisher.
Typeset by Stallion Press
Email: [email protected]
Printed in Singapore.
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Contents
Foreword vii
Contributors ix
PART I: ECONOMIC ANALYSIS OF THE 1
GLOBAL FINANCIAL TSUNAMI
1 The Deepening Global Recession and the Great 3
Depression Fear
Lim Chong Yah
2 The Surprising Resurgence of Fiscal Policy 15
Steven Mark Sheffrin
3 The Global Financial Tsunami: Implications 37
for East Asian Economies
Tan Kong Yam
4 Global Financial Tsunami: Can the Industrial 67
Relations Mechanism Save Singapore
This Time Around?
Rosalind Chew
5 The On-going Global Financial Crisis and 81
Asian Regionalism
Pradumna B. Rana
6 Global Economic Crisis and Energy Security: 97
Integrated Energy Market
Youngho Chang
v
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vi Contents
PART II: ECONOMIC AND POLICY ISSUES 121
7 Singapore Growth Model: Its Strengths and 123
Its Weaknesses
Lim Chong Yah
8 The Role of Competition in Singapore: A Complexity 133
Point of View
Lam Chuan Leong
9 Inflation, Exchange Rate and the Singapore Economy: 145
A Policy Simulation
Choy Keen Meng and Tilak Abeysinghe
10 Workfare, Not Welfare: An Exploration of International 159
Experiences and Policy Implications for Singapore
Kampon Adireksombat
11 What is Human Life Worth? 173
Euston Quah, Chia Wai-Mun and Sng Hui Ying
12 Is the Environment a Game? Game Theoretical 185
Analysis of the Kyoto Protocol
Ernie G. S. Teo
Index 201
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Foreword
I have been very privileged to be associated with economic issues
for most of my career in the public sector. I have come to realize the
importance of careful and rigorous economic thinking as the basis
of formulating sound public policy. Of course, economics is still
more of an art than a science. Nevertheless a good understanding
of its principles is still crucial as a necessary, if not sufficient,
condition for sound and coherent economic policy.
It is therefore very interesting to note that NTU has organized
annual seminars on topical economic issues with the Ministry of
Education for teachers and students. This forum enables the trans-
mission of economic knowledge acquired in academia to future
generations of Singaporeans at large and its future leaders in par-
ticular. Given the imperative of sound economic policies for a
small country immensely dependent on global trade, such a trans-
fer of knowledge is vital for our future.
This book is a result of such a seminar. The contributors of the
chapters have brought together materials that are highly topical
like the current financial crisis and the global recession as well as
analyses of the fundamentals of our economy.
Experts worldwide are debating whether this “tsunami” of the
financial crisis could have been foreseen. A minority is of the view
that this crisis is no “Black Swan” event and there were apparent
signs of its impending arrival. Whatever the outcome of that
debate, the more important issue is how economies like ours can
withstand such periodic crises and emerge to take advantage of the
opportunities thereafter.
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viii Foreword
Whilst the current financial crisis is gripping headlines every-
day, as Singaporeans, we cannot forget the fundamentals that will
govern our future prosperity and viability even as we prepare our-
selves to weather this storm. I perceive the purpose and value of
these NTU–MOE Seminars as a means to pass on the understand-
ing of these economic fundamentals and realities. Given the sound
economic foundations that we have built for ourselves so far, I
believe that our economy does have the competitiveness and
resilience to continue to prosper with the help of future genera-
tions. On that note, I wish all the participants of the Seminar and
the readers of the following chapters an interesting and thought-
provoking journey.
March 2009 Lam Chuan Leong
Ambassador at Large, Ministry of Foreign Affairs
Chairman, Competition Commission of Singapore
Senior Fellow, Singapore Civil Service College
Adjunct Professor, Nanyang Technological University
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Contributors
Abeysinghe, Tilak
Tilak Abeysinghe is Associate Professor of Economics at the National
University of Singapore. He obtained his PhD in Economics/
Econometrics from the University of Manitoba and worked for the
United States Agency for International Development (Colombo)
before joining NUS in 1988. His research interests lie in both
theoretical and applied econometric topics that include economics
of ethnic peace and “selfish economic man”. He has published in
various reputable international journals like Journal of Econometrics,
Economics Letters, International Journal of Forecasting, Journal of
Forecasting, Journal of Population Economics, Applied Economics,
Review of International Economics and NBER paper series. A major
line of his research has been the econometric modeling of the
Singapore economy, forecasting and policy analyses. As the coor-
dinator of the Econometric Studies Unit since 1993, he has built a
number of econometric models, one of which appears in the
Routledge book, The Singapore Economy: An Econometric Perspective,
that he co-authored with Choy Keen Meng. Policy analyses based
on these models have appeared in news media frequently. Tilak
has also held various important administrative responsibilities at
NUS such as Deputy/Acting Head, Director of Economics
Graduate Program, Deputy Director of the Singapore Center for
Applied and Policy Economics and member of the Faculty Tenure
and Promotion Committee.
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