Is this guy trying to tell us that the Singaporean economy may contract by 9% in 2009, yet he doesn’t see any sign of a fall in consumption or housing demand? And the reason for this is Singapore’s public/private-sector social safety net that protects jobs and income?
There must be some truth to that idea. Social and legal norms do affect the way economies react in the face of an economic downturn. For example, it’s much easier to shed excess labor in the United States than it is in Japan; you only need to look at the statistics to see that. It’s probably the same thing in Singapore. But no visible change in consumer and household behavior? I’ll believe it when I see the numbers.
Incidentally, it’s interesting that writers tend to take a somewhat similar 5-6% (2009) downturn in the Japanese economy and criticize it for relying too much on exports. For those people, the parts of the Japanese economy that are not linked to exports are an inefficient, uncompetitive drag on the Japanese economy. Perhaps. But try telling that to Carrefour and Wal-Mart, whose forays into the Japanese retail sector have been less than a resounding success.
I’m not saying those critics are wrong. But they haven’t made their case either. I think they’re just doing a riff on a piece of conventional wisdom.