The Sun 2008-10-30 Page18

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theSun

INTERVIEWS VIEWS

| THURSDAY OCTOBER 30 2008

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Spend wisely and be selective WITH WESTERN FINANCIAL INSTITUTIONS FALLING LIKE TENPINS, GLOBAL STOCK MARKETS GOING THROUGH A ROLLER-COASTER RIDE AND OUR SOUTHERN NEIGHBOUR IN RECESSION, WHO CAN BLAME MALAYSIANS FOR FEARING THE WORST. WHAT’S IN STORE FOR CONSUMERS AND INVESTORS? HUSNA YUSOP CATCHES UP WITH DOMESTIC TRADE AND CONSUMER AFFAIRS MINISTER DATUK SHAHRIR SAMAD FOR SOME ANSWERS theSun: The world is reeling from a since the beginning of the year. The first serious financial crisis. Everywhere, two quarters they were technically in people are talking about measures to recession because they didn’t have growth tackle recession. But our government for two successive quarters. Technically. seems cool about it. It is saying we will But, it was not felt so much because be able to ride it out. What’s your view? the expatriate community, the financial If you look at it now, today in the other community in Singapore, only began countries, the problem is of to feel the impact in this the banks. Not like in 1997, quarter – because of what is where it was the currency happening worldwide in the problem. The baht came financial institutions. They down, for example. Our have the branches of the currency also depreciated, foreign banks, they have the collapsed against the US fund managers, hedge funds dollar. There were companies operating in Singapore. that borrowed US dollars, And in fact the situation because of low interest rate, there, Singaporeans are they could not repay. So it allowed to invest in overseas affected the banks as well. international funds. Like, So, the currency problems they buy Lehman Brothers’ affected our banks. That was fund, then suddenly it has no the financial crisis in 1997. value, so, there is an impact. This time, it is also a case of the banking and So, our country doesn’t financial system having need a contingency plan problems, and it spread or anything of that sort out. But for ourselves, for like what some economists Malaysia especially, our stock were saying? market is affected because We do have to respond of the downturn in the stock because we are not immune markets elsewhere. It affected from what is happening. equities worldwide. But our Because, our export market banks are strong. for example, like the US, There is no need for our is going into recession. It There is no need banks to be bailed out or will impact upon us in the for our banks to injected with capital simply sense that we will not be be bailed out or because our non-performing able to export as much to loans are also small. They America. Our export of injected with capital are not as large as what electronics and electrical simply because our happened in 1997 and what items will be affected. And non-performing loans we also will be affected by is happening in the West – in are also small. They are the fact that the price of US and Europe. Countries like Iceland for example, have not as large as what crude oil has gone down. become bankrupt and need happened in 1997 and So, our export revenues International Monetary Fund will also come down. There (IMF)’s help. In a way, Iceland, what is happening in will be difficulty also in the the West – in US and Argentina and Pakistan have export of palm oil because Europe. Countries their financial system, and its price has come down. they themselves, require help And we will also be more like Iceland for from the IMF. We are not in in competition with other example, have become that position. vegetable oils as well. So, of bankrupt and need course we are not immune. International Monetary But generally we will still But, how come Singapore is admitting to being in Fund (IMF)’s help. In a be able to maintain our recession? way, Iceland, Argentina economic growth. Because Singapore, by being and Pakistan have an international financial Will it not directly affect their financial system, the layman? centre, the shocks of what and they themselves, No. Because, for next happens elsewhere, in New York, in Wall Street, in the year’s budget we are taking require help from the banks overseas, international, IMF. We are not in that care of the welfare of the and so on, affect them faster. low-income groups. We position.” But their banks are also still are giving government okay. They don’t have a assistance to poverty problem. groups and welfare assistance also has been increased. So, in a way, they won’t But Singapore did announce certain be affected. Then, those who are earning measures to tackle the recession? a pay, those who are working, will not be Because, its growth depends a lot upon affected except those perhaps in the export growth on the economic activities and the industries like electronics and electrical, economies of the US, Europe, Japan and so there we may face some problems. But we on. They (Singapore) have had recession are watching, we are monitoring.