Sunday 17 / November / 2024
Singapore: For many cities, the COVID-19 pandemic is now in the rear-view mirror. There are still some outbreaks and along with it, concerns and worries, but generally people are less fearful of the virus than two years ago.
How countries and cities have emerged from this once-in-a-lifetime (hopefully) medical crisis varies and mostly depended on how their national and local governments and officials responded. The better resourced ones, and those who took a far-sighted strategic view and planned for a post-COVID-19 world, emerged stronger and ahead of their rivals. Recently, The Economist published an index which ranked cities based on economic performance over the last three years to determine the cities which are flourishing in the current "turbulent geopolitical era". The ranking placed Singapore second behind Miami, USA, and ahead of Dubai.
The venerable British publication created a list of ten cities and compared them based on how they responded to the twin challenges of the global pandemic and geopolitical uncertainty based on changes over the last three years in four criteria, population, economic growth, office vacancies and house prices. Each city was ranked on how it performed on the measures to create an overall score.
The other cities in the study according to rank are New York in fourth, followed by London, Tokyo, Sydney, Johannesburg, Paris and San Francisco.
Based on data from The Economist, between 2019 and 2022, Miami's population declined 1.6 per cent, real GDP grew 10.6 per cent, office vacancy rate increased slightly by 2.3 per cent, and real house prices jumped a staggering 39.5 per cent.
For Singapore, it's population shrank 1.2 per cent, real GDP increased 6.9 per cent, office vacancy rate went up slight by 1.4 per cent and housing prices expanded 10.9 per cent.
Dubai raised its population by 5.8 per cent, but real GDP contracted 1.9 per cent, saw office vacancy reduced by three per cent and housing prices increasing by 11.9 percent.
Using the above indicators, Singapore's perennial rival financial centre, Hong Kong, which saw stricter COVID-19 policies, and which only allowed quarantine-free travel in late September last year (about six months after Singapore), fared worse than Singapore. Hong Kong was not included in The Economist study.
Based on data from the World Bank, between 2019 and 2022, Hong Kong's GDP fell about one percent to USD359.8 billion. Its population declined about 2.3 percent from 7.50 million to about 7.33 million according to Hong Kong government numbers. Many expatriates left the special administrative region of China for cities with less stringent COVID rules like Dubai and Singapore.
With fewer residents, it is therefore not surprising that office vacancies rose and residential property prices plummet.
According to a recent Savills report, Hong Kong Grade A office rents tumbled 7.6 per cent for the full year of 2022 and are now 31.4 per cent below their previous 2019 peak. The report added that "vacancy rates also increased from 10.4 per cent from 9.9 per cent a year ago with vacant space standing at 6.6 million square feet net at the end of 2022."
The value of residential property is also experiencing a decline. With large numbers of expat workers leaving the former British colony, prices of Hong Kong's residential properties plunged to a near five-year low and this has been exacerbated by rising interest rates. Industry analysts do not see this trend ending soon.
Although Singapore's COVID lockdown was tighter than in Dubai and most Western countries, life was considered pretty good when compared with Hong Kong.
Singapore response to the COVID-19 pandemic is widely regarded to be effective. Before COVID, Singapore already had a strong healthcare system. When the pandemic struck, the broad and quick deployment of screening centres and contact tracing in the early phases of the pandemic resulted in the containment of the virus. This bought time for a nation-wide vaccination campaign to finally bring the spread of the virus under control.
Singapore health authorities also monitored the development of vaccines closely and was one of the first in the world to place large orders for the mRNA vaccines.
While the borders were closed and economic activity slowed, Singapore prepared itself for the day when the world reopened by investing in digital technology, training and future proofing its economy. It also offered grants to companies for training and to incentivised them to retain their employees, so they did not have to lay off workers.
For example, Singapore Airlines was one of the first in the region to restart wide-scale deployment of flights as it kept most of its fleet and workers. This resulted in the carrier being able to take advantage of the pent-up travel demand resulting in record profits.
The Economist report said that during the COVID-19 pandemic, "cities in bits of the world that did not go overboard with restrictions, such as Dubai and Miami, benefited." In some cases, at the expense of its rivals.
In the case of Miami, it was at the expense of San Francisco. San Francisco which came in 10th in The Economist report saw its population decline by 8.3 per cent and office vacancies skyrocket to almost 20 per cent. In Asia, Singapore and Dubai benefitted at the expense of Hong Kong. Being neutral in this age of geopolitical tensions also helped.
