Singapore’s 2023 hinges on smooth China reopening

City-state’s economic growth as low as 0.5% in 2023 if China’s ‘zero-Covid’ exit fails to produce a fast and strong rebound

Singapore’s export-reliant bellwether economy is bracing for tough times in 2023 with trade expected to shrink or record no growth amid weakening global demand, tighter liquidity and persistent inflation. Accordingly, many economists foresee a possible technical recession in the first half of next year.

Though the Ministry of Trade and Industry (MTI) does not forecast a recession in its baseline scenario, official 2023 projections show gross domestic product (GDP) growth petering to a slow crawl of anywhere between 0.5% and 2.5%. Growth prospects are brightest for tourism and consumer sectors but it remains unclear whether falling export demand can be sufficiently offset.

Singapore’s key non-oil domestic exports, or NODX, which range from petrochemicals and pharmaceuticals to semiconductors and other electronics, tumbled 14.6% year-on-year in November, marking the second consecutive decline following a 6.1% contraction in October. Flagging orders from Hong Kong and China were the largest contributors to the fall.

Beijing eased many of its strict “zero-Covid” rules earlier this month in a policy U-turn following widespread protests, but its reopening has since been complicated by the unchecked spread of the virus and overwhelmed health services. Nonetheless, the potential for a Chinese economic rebound could help Singapore to outperform its downbeat official growth forecast.

Read the full story at Asia Times.

Nile Bowie is a journalist and correspondent with the Asia Times covering current affairs in Singapore and Malaysia. He can be reached at nilebowie@gmail.com.

Perilous pact keeps Anwar on top, for now

Malaysian leader wins shoo-in confidence vote and cements controversial cooperation deal in bid to steady his ‘unity’ government

Malaysia Prime Minister Anwar Ibrahim won crucial backing for his premiership on Monday (December 19) when parliament passed a motion of confidence, helping consolidate his position as head of a royally-brokered “unity” government formed after last month’s election delivered a hung parliament.

The confidence motion was not a formal requirement but was held at the discretion of the 75-year-old premier in a bid to cement his legitimacy after rival and former premier Muhyiddin Yassin cast doubt on his support, accusing his Pakatan Harapan (PH) bloc of committing the “biggest electoral fraud ever” in cahoots with the former ruling Barisan Nasional (BN) coalition.

Neither the government nor the opposition pushed for lawmakers to vote individually; the confidence motion instead passed by a simple voice vote. But the government’s command of 148 out of 222 parliamentary seats, enough for a two-thirds majority to table and pass constitutional amendments, was ostensibly demonstrated through votes for the new house speaker and two deputies.

Hafidzi Razali, a senior analyst at the BowerGroupAsia consultancy, said the move “allowed Anwar to officially record his coalition’s numbers in the parliament, and not through untransparent political maneuvering,” a reference to the use of signed statutory declarations (SDs) from individual lawmakers that the two most recent administrations have relied on to shore up support.

Read the full story at Asia Times.

Nile Bowie is a journalist and correspondent with the Asia Times covering current affairs in Singapore and Malaysia. He can be reached at nilebowie@gmail.com.

Anwar’s ‘unity’ government a fraught Faustian bargain

Malaysian leader puts his avowed ‘clean governance’ principles on the line in coalition with corruption-tainted UMNO

Malaysian Prime Minister Anwar Ibrahim’s strategic allocation of key cabinet seats appears to have bolstered the near-term stability of his new royally-brokered “unity government”, but volatile political fault lines and strong economic headwinds will test his leadership in 2023.

While selecting a cabinet of past political foes was never going to be easy, the 75-year-old premier’s choice of graft-accused United Malays National Organization (UMNO) president Ahmad Zahid Hamidi as deputy prime minister has been an especially bitter pill for Malaysians who voted for Anwar’s good governance and anti-corruption agenda.

The November 19 election delivered a hung parliament where Anwar’s Pakatan Harapan (PH) bloc won the most seats with 82 but fell well short of a majority. The PH chief was appointed by Malaysia’s constitutional monarch to lead a unity government after Zahid’s Barisan Nasional (BN) coalition agreed to back Anwar’s bid, prompting key Borneo-based parties to do the same.

While the UMNO president’s top-level appointment has raised eyebrows, it is widely seen as a compromise of political necessity. Zahid, who served as deputy premier from 2015 to 2018 under the scandal-plagued Najib Razak administration, was not appointed to serve in the two governments preceding Anwar’s due to the various corruption-related court cases he faces.

Read the full story at Asia Times.

Nile Bowie is a journalist and correspondent with the Asia Times covering current affairs in Singapore and Malaysia. He can be reached at nilebowie@gmail.com.

Micron reveals its big picture growth plans

US chip maker is cutting CapEx now amid a downturn but plans to splurge $150 billion on R&D and new fabs over the next decade

America’s Micron Technology, one of the world’s leading memory and storage chip makers, is making billions of dollars in new global investments to meet anticipated long-term demand for its leading-edge technologies even as the firm scales back spending on chip production amid a worsening supply glut and market downturn.

Surging work-from-home demand for consumer technology products during the Covid-19 pandemic sparked a boom in semiconductor orders but inflationary pressures coupled with a return to the office has put a damper on new personal computer and smartphone purchases, leaving the market awash in chips. New US restrictions on chip and chip-making equipment exports to China are also roiling supply chains.

“The industry downturn is continuing and continues to be pretty severe,” said Sumit Sadana, Micron’s executive vice president and chief business officer, in an exclusive interview with Asia Times. “Our goal is that we quickly get to a point where the demand growth is ahead of supply growth so that the significant amount of… inventory starts to normalize.”

Sadana pointed to an “unusual confluence of events” including rate tightening to rein in decades-high inflation, the Russia-Ukraine war and China’s “zero-Covid” policy and property slump as causing an “unusual level” of supply-demand imbalance in DRAM and NAND memory chip markets that usually account for over 90% of Micron’s revenue.

Read the full story at Asia Times.

Nile Bowie is a journalist and correspondent with the Asia Times covering current affairs in Singapore and Malaysia. He can be reached at nilebowie@gmail.com.