The report motivated me to think more deeply about the current state of the Singapore economy and its future prospects. In this column, I wish to discuss four questions.

First, what is the current state of the Singapore economy?

Second, is it the worst-performing economy in Asia?

Third, are the problems of the economy cyclical or structural?

Fourth, should we be pessimistic or optimistic about the prospects of the Singapore economy?

The Singapore economy is projected to grow at 1.4 per cent this year.

With the exception of tourism and related industries, the other sectors of the economy are not doing well. Manufacturing, finance and insurance, construction, wholesale and retail are all experiencing weak growth. Non-oil domestic exports have actually shrunk, compared with a year ago. Fortunately, the unemployment rate remains very low at 2.1 per cent. In view of these facts, it is not surprising that the Business Optimism Index is in negative territory.

Worst in class?

Is the Singapore economy the worst-performing economy in Asia?

Singapore’s per-capita gross domestic product (GDP) last year was $72,711, the highest in Asia. Singapore’s performance should not be compared with those of low-income or middle-income countries because they are at different stages of their economic development.

Singapore should be compared with other high-income economies in Asia, namely Japan, South Korea, Taiwan and Hong Kong. Those four economies are projected to grow at 2.4, 2.6, 1.1 and 2.1 per cent, respectively, this year. Singapore is not the worst in class. Taiwan is.

Are the problems of the Singapore economy cyclical or structural in nature? I would argue that they are mainly cyclical but there may be some structural issues which we should consider.

It is well known that Singapore’s external trade is three times the size of its GDP. We are the most trade-dependent economy in the world. World trade is weak and this has affected our economy very badly.

In addition, with the exception of India and Asean, all the other major trading partners, such as China, the United States, Europe and Japan, are experiencing sub-optimal growth.

Another factor affecting us is the downturn in the oil and gas industry.

Some of our thoughtful economists have, however, pointed out that there are some structural problems. They point to high costs, restrictive labour policy and risk-averse policymakers as three of the problems.

They point out that many small and medium-sized enterprises are being squeezed by high rental, on the one hand, and the inability to employ more foreign workers, on the other hand.

Some of my friends have decided to close their businesses. They told me that they could not survive the constant pressure of escalating rent. The invention of the real estate investment trust (Reit) is a boon for investors but a bane for tenants. An Irish friend who has lived in Singapore for over three decades recently warned me that Singapore is in danger of becoming a rentier society.

Optimistic or pessimistic

Should we be optimistic or pessimistic about the future of the Singapore economy? I am optimistic for these reasons:

Singapore has a corruption-free business environment and the rule of law is strong.

We have world-class infrastructure and good connectivity.

It is easy to do business here and we enjoy industrial peace.

We have a skilled and hard-working workforce.

We have a critical mass of interlocking activities in our financial and regional business hubs.

We have an IT-literate population and we aim to transform Singapore into a smart nation.

We have a culture of accepting change and embracing technology, including disruptive technologies.

In our new world, the most important resource of a country is its people. Brain power is more important than muscle power. Knowledge-intensive industries represent the future. Innovation, creativity and productivity are the new engines of growth.

Singapore is doing a very good job in educating and training its young people. Singapore’s Primary 4 and Secondary 2 students were ranked No 1 for maths and science in the 2015 Trends in International Mathematics and Science Study. Singapore’s 15-year-old students also came first for mathematics, science and reading in the 2015 Pisa survey conducted by the OECD in 72 countries. Finally, the National University of Singapore and Nanyang Technological University have been ranked No 1 and No 2 respectively in the 2016 Times Higher Education ranking of universities in Asia.

In the World Economic Forum’s Global Competitiveness Index (2016-2017), Singapore is ranked No 2, after Switzerland. In the Institute of Management Development’s 2016 World Competitiveness Scoreboard, Singapore is ranked No 4, after Hong Kong, Switzerland and the US.

I am confident that when the world economy recovers and world trade bounces back, Singapore’s economy will experience an upturn.

Singapore is investing wisely in education and skills training. Led by the Committee on the Future Economy, we are preparing to reinvent ourselves again in order to take advantage of the new opportunities in the digital economy, in disruptive technologies and much more.

Singapore is very fortunate to sit astride the three biggest growth stories of human history, namely China, India and Asean. We will participate in these growth stories. In my view, Singapore has a very bright future. – Straits Times/ANN

Tommy Koh is ambassador-at-large at Singapore’s Ministry of Foreign Affairs.

As of December 21, the SET Index had risen 17 per cent since the beginning of the year, compared with a range of minus 4 per cent to plus 13 per cent for other markets in the region. This has been the best annual performance since 2012. This reflected strong profit growth of 35 per cent for the first nine months of 2016.

Nonetheless, we maintain our 12-month target for the SET Index at 1,570 points, based on a forward price-to-earnings ratio (P/E) of 15.4 times for 2017. The upside potential of the SET Index from the current level is quite limited in light of the fact that the EPS (earning per share) growth of the Thai market is relatively low compared with regional peers. As the government continues to accelerate its spending, mainly on infrastructure projects, to drive the economy, we believe that construction activity will be ramped up in 2017. This will be positive for leading Thai contractors like Sino Thai Engineering (STEC) and Ch Karnchang (CK). We estimate construction contracts of about Bt500 billion to open for bidding. DBS also expects the baht to be on a downtrend throughout 2017 because of the appreciation of US dollar after the recent increase in the US policy interest rate. This will benefit the Thai export sector.

On this count, we like KCE Electronics (KCE), which exports 95 per cent of its products. The company could also leverage on the fast-growing PCB (printed circuit board) market for the automotive segment.

We also maintain our top picks, which are ANAN (Ananda Development), COM7, GL (Group Lease), MTLS (Muangthai Leasing) and TCAP (Thanachart Capital).

Tisco Securities

For the final days of 2016, market sentiment is likely to be muted by the Christmas and New Year holidays, lacklustre growth in tourist arrivals, and the US Federal Reserve’s increase in its policy interest rate.

This month has been a very good one for the contractor sector, with significant progress in many mass-transit projects, including the announcement that the CK/STEC (Ch Karnchang/Sino-Thai Engineering and Construction) joint venture won the last contract (No 5) for the Orange Line for Bt4.9 billion. In all, the CKST group won the most contracts for this line with a combined value of Bt47 billion. CK holds 60 per cent and STEC owns 40 per cent in the JV. ITD (Italian-Thai Development) won a contract worth Bt18.59 billion, and UNIQ (Unique Engineering and Construction) got one worth Bt13.75 billion. We remain overweight on Thai contractors, with STEC, CK and UNIQ as our top picks. Note that we recently upgraded our rating on STEC from “hold” to “buy” after its joint ventures won three MRT line projects worth a total of Bt68.9 billion (STEC’s portion).

Nuttachart Mekmasin

Vice President

Trinity Securities

We expect the SET Index next year to move sideways in a range of 1,350-1,620 points. More downside risks are projected. Despite the likely depreciation of the US dollar, commodity prices are estimated to improve after higher inflationary pressure across the world. Amid the SET Index’ higher downward risks and likely less liquidity in the world, stock investment should be accumulated when the SET Index makes corrections. Stock picks for 2017: energy and petrochemical group – PTT, IVL (Indorama Ventures); agricultural business – BRR (Buriram Sugar), STA (Sri Trang Agro-Industry); food and beverages group – CPF (Charoen Pokphand Foods), TU (Thai Union Group); electronics group – SMT (Stars Microelectronics (Thailand)), SVI; and construction group – CK (Ch Karnchang), EAFCO.

“We appreciate that the Obama administration had recognized and supported our efforts to maintain the status quo (of the Taiwan Strait),” Taiwan presidential spokesman Alex Huang said in a statement. “As for the words about US foreign policy, we have no comment.”

Obama said at his year-end news conference Friday the Taiwan issue was of utmost importance to the Chinese, and how they react to any potential change could be very significant.

“That status quo, although not completely satisfactory to all the parties involved, has kept the peace and allowed the Taiwanese to be a pretty successful economy and a people who have a high degree of self-determination,” Obama said.

“It does mean that you’ve got to think it through and have planned for potential reactions that they may engage in,” he added.

The “one-China” policy became an issue after Trump talked to President Tsai over the phone earlier this month, despite the fact that the governments terminated diplomatic relations in 1979.

The call risked souring US relations with China, which considers Taiwan a breakaway province. Beijing vigorously opposes any official contacts with the Taipei-based government.

Trump later said he would not feel bound by the decades-old policy.

According to the “one-China” policy, China’s ruling Communist Party requires other nations to avoid formal diplomatic recognition of Taiwan, although the US maintain many informal channels.

MIGRANT domestic workers in Thailand need to be formally recognised as employees with legislation to protect their rights, the president of a foreign workers group has said.

Champadolma Lama, president of the Network of Migrant Domestic Workers in Thailand, said some foreign workers might get comfort from being seen as “part of the family”, but that type of relationship can severely undermine their labour rights and social protection as workers.

A recent survey found that foreign domestic workers worked excessive hours, averaging 11.89 hours a day.

Those caring for children or for the elderly reported an average of 13.5 hours per day. The survey also found that most workers did not receive days off, even though Thai law requires employers to provide at least one day off per week.

“When they [employers] say we’re a part of the family it makes us feel very special – but they have to know that we are still workers,” Champadolma said. “When you say I’m a part of the family, you can’t knock on my door at two in the morning just to open the door because the boss is coming home from a party”.

Champadolma migrated to Thailand from Myanmar in 1992 when she was just 17 years old. Over 24 years she has worked for seven different families under a variety of working conditions.

Giving one example, she said she loved the children she had been hired to raise. “Being a nanny, both my employers used to work. I used to work from 5am until 8 o’clock at night. The recognition for what I did was not there,” she said.

Emotional ties usually have a significant impact on the working life of domestic workers, making them reluctant to negotiate terms of employment or even unable to leave abusive situations.

The International Labour Organisation (ILO) recently conducted a study linking public attitudes to working conditions experienced by migrant domestic workers in Thailand and Malaysia.

The study emphasised the need to change public attitudes towards migrant domestic workers and for their work to have the same protections as other sectors.

A key finding of the study was that a “fictive kin” relationship – a social tie based on neither blood nor marriage – between domestic migrant workers and their employers was prevalent in Thai households.

‘Master-servant relationship’

This type of relationship usually did not entail the same long-term commitment to emotional and social well-being as kin relationships, the study said. Furthermore, the employer maintained the power to apply the fictive kin relationship selectively or even to withdraw it entirely.

The survey estimated that 300,000 domestic workers, both migrants and Thai nationals, work in Thailand. More than 50 per cent are migrants from Cambodia, Laos, Myanmar and, more recently, Vietnam. Thailand has no formal migration channels open to domestic workers, which often leads to irregular migration and informal working arrangements, putting workers further at risk.

“Many scholars say that employment relationships originate from the history Thailand has,” said Chayanich Thamparipattra, one of the study’s main researchers. She described the relationship as a “master-servant relationship” and how isolated living situations have “blocked some of their rights such as education and freedom”.

She added: “Ministerial regulations still don’t provide any protection for important rights such as minimum wage or maternity protection.”

The study noted that a formal contract could solve some of these issues, but it was found that migrant workers associated contracts with restrictions of their freedom to leave an employer. Only 7 per cent of migrant domestic workers involved in the survey had a written contract. Employers also expressed the opinion that contracts were not appropriate for domestic workers.

Despite being a crucial part of many households, domestic work is often not viewed as being “proper work”, leaving workers vulnerable. In Thailand, domestic workers are often overworked, and often undervalued both economically and socially in their household roles.

Abu Sayyaf leader, Abraham Hamid, had led the kidnapping of several foreigners from a tourist resort in the volatile southern Philippines last year, two of whom were later beheaded.

“The death of Hamid is a big blow to the (Abu Sayyaf) as it neutralised one of the notorious bandits and will degrade their capability for spotting and kidnapping victims in the future,” said regional military spokesman Major Filemon Tan.

Two other militants were killed alongside Hamid in the shootout with Malaysian police in Lahad Datu in eastern Sabah, he said.

The Abu Sayyaf beheaded two Canadian hostages after demands for millions of dollars were not met, but released two others, a Norwegian and Filipina, after ransoms were believed to be paid.

Tan said Hamid had also been involved in the kidnapping of four Indonesian crewmen in April.

There have been a spate of kidnappings of Malaysian and Indonesian sailors at sea in recent months that have been blamed on the Abu Sayyaf.

While Hamid and two militants were killed, Sabah security forces have arrested two others, Tan added.

Sabah police chief Abdul Rashid Harun told AFP the incident was the Malaysian authorities’ first direct confrontation with suspected kidnappers in the waters off eastern Sabah.

On his blog, Malaysian Prime Minister Najib Razak praised his security forces and said Kuala Lumpur and Manila would cooperate to fight the recurring kidnappings.

The Abu Sayyaf, a loose network of militants based on remote islands in the southern Philippines, has defied more than a decade of military offensives.

The group was formed in the 1990s with seed money from Osama bin Laden’s Al-Qaeda network, but has been on a lucrative kidnapping spree in recent years.