What is the impact of the continuing Hong Kong unrest on Singapore, which has great demographic, strategic and economic similarities with the self-ruled city? The latest estimates by financial sector analysts observers show that capital has started flowing to Singapore in the backdrop of the worsening Hong Kong standoff. According to a Goldman Sachs estimate, at least $4 billion has moved in Hong Kong dollar deposits to Singapore until August.
An Economist analysis put it succinctly: "And if one place stands to benefit from Hong Kong's troubles, it is that other self-governing, Chinese-majority, financial, commercial and shipping hub in East Asia: Singapore." The estimated $4 billion that moved to Singapore from Hong Kong in the April-August period may not be a great amount, but the inflows are expected to gain momentum in the coming months.
"Whenever there is political instability in the region, money flows into Singapore," Bilveer Singh, an associate professor at Singapore's National University, told Bloomberg. The trend mf money flowing to Singapore will "likely continue as the situation worsens in Hong Kong," a singapore-based analyst with Maybank Kim Securities said.
Earlier this week, the chief of Singapore's central bank had played down the inflow of capital into the city state owing to the political protests in Hong Kong. There are some signs of the capital inflow happening but "we don;t think its significant or substantial," Ravi Menon, Managing Director of the Monetary Authority of Singapore (MAS) told Bloomberg.
At the same time, a section of the Singaporean officials also sees the Hong Kong disruption as bad for the economies of the entire region. Estimates said this week that, Hong Kong's economy, battered by the crippling protests, could grow just 0.3% this year and 1.5% in 2020, which is way lower than the 2.4% and 1.5% growth rates as per initial projections.
IMF"s Regional Economic Outlook report released on Wednesday showed that growth in Asia could moderate to 5% in 2019, and 5.1% in 2020, which is 0.4% and 0.3% lower than its April projections, CNBC had reported.
Singapore and Hong Kong have been the leading lights of the financial and trade markets in the Asian region. Both are commerce-friendly, corruption free and have transparent regulations. While Singapore comes second in the World Bank's ranking of 190 countries for the ease of doing business, Hong Kong is fourth in the list.