Najib, who is also Finance Minister, said in a written reply to parliament Thursday, that Malaysia was still classified as a nation with manageable debt, and said measures were in place to control spending with 2020 being set as the year where the country may start seeing its credit improving.

He said fiscal consolidation measures would be continued to reduce the country’s deficit levels, stage by stage, by prioritising expenditure cuts and only taking loans for national development projects.

“Adherence to fiscal discipline and good debt management will continue to be emphasised to ensure we remain strong and able to cushion any crisis,” he said.

“We will ensure that administrative expenditures will be footed by profits from national products, which will also be used to pay for development costs.

“Prudent spending will be emphasised to prevent wastage. Government borrowing will solely be to finance development and high-impact projects that will contribute to the country and the people in the long term,” he said.

Najib added that the government would continue its policy of giving out domestic loans that does not contribute to inflation, taking into account the high liquidity and lower borrowing costs.

Najib had to revise Budget 2016 in January, to optimise the country’s developmental and operational expenditures in the face of slower economic growth.

Nguyen ThI Thu Trang, Director of the WTO and Integration Centre under the Viet Nam Chamber of Commerce and Industry (VCCI), spoke about concerns regarding Viet Nam law at a conference in Ha Noi yesterday.

“To constantly improve the investment environment is an internal requirement of any economy, and Vietnam is no exception,” Trang said.

For instance, she said the EVFTA agreement allows EU investors in Vietnam to sue State agencies if these agencies violate the EVFTA’s commitments in a number of clauses related to most-favoured-nation treatment, which causes damage to investors.

In addition, Vietnamese law doesn’t comply with EVFTA’s commitments on compulsory purchase requisition and pay compensations, as well as paying interest for late compensation, Trang said.

With the current Vietnamese law system, domestic investors don’t have an opportunity to access investor-state dispute settlement (ISDS) cases, she said.

To solve these problems, Trang said that instead of checking all specialised legal documents, the lawmakers should create a separate law covering the implementation of the agreement’s investment section.

Speaking at the conference, Former Director of Department of Legislation under the Ministry of Planning and Investment Phim Minh Dung said an obstacle to investment is not only the law, but also the implementation of the judgment.

“The judgment execution is now very passive. We must improve law enforcement, as well as the court system,” Dung said.

Dung said Vietnamese law should be based on the foundations of modern market economics instead of reviewing the rules every time the country signs an FTA.

Good preparation will better serve the implementation of the agreement and promote investment flows from the EU to Vietnam, as well as stimulate two-way trade, Dung added.

The investment section in EVFTA consists of 60 pages and three chapters, including investment liberalisation, protection of investment and the ISDS mechanism.

Growth is likely to come in at a modest 1.9 per cent this year, down from an earlier forecast of 2.2 per cent, say economists polled by the Monetary Authority of Singapore (MAS) in its quarterly survey out yesterday (March 16).

The latest poll, sent out on February 24, reflects views from 24 economists who closely monitor the Singapore economy.

Government forecasts tip growth to come in at between 1 per cent and 3 per cent this year.

Economists said the outlook worsened at the start of this year amid oil price volatility and signs of flagging global demand.

The jury is still out on China’s mid-term growth prospects, while other traditional global growth drivers like the United States continue to eke out a slow recovery.

Singapore’s manufacturing and finance and insurance sectors have been hit the hardest, with economists giving these industries the sharpest growth downgrades in the latest survey.

Manufacturing, which makes up a fifth of the Singapore economy, is now tipped to shrink 2.7 per cent this year, a deeper contraction than the 1.2 per cent decline estimated in the previous survey.

“Manufacturing is still very much responsible for the state of the numbers,” said CIMB Private Bank economist Song Seng Wun.

The finance and insurance sector, which contributes about 13 per cent of gross domestic product, is expected to expand 3.6 per cent according to the latest survey, down from an earlier estimate of 5.9 per cent.

UOB economist Francis Tan noted that bank loans have been shrinking in recent months, a possible sign that financial institutions are holding back on lending given the poor outlook.

Meanwhile, survey respondents expect inflation for this year to come in at negative 0.2 per cent, down from an estimate of a 0.5 per cent rise in the previous survey.

Those surveyed also expect MAS core inflation – seen as a better gauge of out-of-pocket expenses for households – to come in at 0.8 per cent, down from the 1 per cent projected in the previous survey.

This comes as global energy prices experienced a further rout at the start of the year amid ongoing uncertainty over the economic outlook.

Song said he is still keeping his fingers crossed for brighter prospects in the second half of this year. “We’ve said that for the past few years about the second half and so far it hasn’t panned out… But with the labour market in developed economies improving, there is a spark of hope. The underlying assumption that cheaper energy is good for global growth also still stands.”

Economists in the latest MAS survey expect Singapore’s economy to grow a stronger 2.5 per cent next year.

The museum, located in Sentosa’s Imbiah Lookout, said in a Facebook post on Thursday (March 17) morning that the figures will be displayed at the courtyard outside the attraction.

The public are welcome to take photos with the figure from March 23 to March 27, said Madame Tussauds. They may also bring flowers as a gesture of respect.

March 23 marks the first-year death anniversary of Lee, who died at the age of 91.

“Lee Kuan Yew was highly regarded and well respected, both in Singapore and abroad. We hope this will encourage locals and tourists to take a moment to remember him, and what he achieved for the country,” said Craig Connor, general manager of Madame Tussauds Singapore.

“We will also have a special ’Book of Memories’ in which people may pen their thoughts about what they remembered Lee for and how he had inspired them in one way or the other.”

The book will be kept in the museum for public viewing.

The iconic figure of Lee and his wife smiling, arm-in-arm and seated against a backdrop of red flowers formed in the shape of two hearts, was unveiled at the museum’s grand opening in October 2014.

It was sculpted based on a photo taken by Kwa’s niece in Sentosa on Valentine’s Day 2008.

The museum also has another figure of Lee which he did during a sitting in 1997.

A proposed training programme lasting at least 10 hours – shorter than the 60-hour taxi driver vocational licence (TDVL) course – is being considered by the authorities for these private chauffeurs, sources told The Straits Times.

The licensing requirement, which follows a review that started last October, is expected to be announced by the Ministry of Transport next month during the budget debate.

There will be a “phase-in” period to allow drivers time to go for the vocational course, said industry sources who requested anonymity. It is estimated that there are tens of thousands of private-car hire drivers here.

Course credits attained during the proposed vocational training could also be used for the TDVL, should the drivers want to become cabbies.

Besides vocational licensing, sources said, the authorities are mulling over clearer markings on cars being used to pick up passengers. This could be through decals pasted on these vehicles to identify them.

Asked about the upcoming regulations, the Land Transport Authority said only that it was finalising the review. “More details will be made known in the coming weeks,” a spokesman said.

With a regulatory framework, Singapore will join other countries, such as the Philippines and Australia, which are moving towards regulating an industry that has come under heat worldwide for allegedly competing unfairly with taxis.

Transport Minister Khaw Boon Wan had said in October that, where justified, the government would “level the playing field” between taxis and private-car hire services.

The head of Grab Singapore, Lim Kell Jay, said vocational licensing can serve as an “added assurance” to commuters.

He said the company does its own screening in the form of “background checks, in-person registration, induction training as well as vehicle inspections”.

Uber’s general manager in Singapore, Warren Tseng, said he was “hopeful of a positive outcome” to the review – one that will ensure drivers can continue to have flexible work opportunities, and commuters, reliable transportation options.

Private-car hire driver James Koh, 53, said if vocational licences become a requirement, part-timers may find it a hassle and stop driving. “We have been operating for so long without problems, I find it strange that we need to have a licence,” he said.

However, National University of Singapore transport researcher Lee Der Horng said regulations actually benefit private-car hire services by legitimising them.

He said services like Uber and GrabCar should also disclose data on their platforms with the government, as taxi operators do.

“The government can have full visibility of how many vehicles are on the roads on a day-to-day basis, and how much mileage is clocked.

“By being better informed, policies can be adjusted to help solve transportation issues in Singapore, for example, by putting more taxis or private cars for hire on the roads.”

After 25 years in Singapore’s financial services industry, Song has endured enough business cycles to understand that job cuts come hard and fast in his field when business conditions sour.

Fortunately for Song, his jobless status was short-lived; within weeks, he was offered the chance to rejoin CIMB as an economist for its private banking unit.

But he knows that his industry is not out of the woods yet.

“There were far fewer initial public offering (IPO) or merger and acquisition deals last year, and that capital market slowdown had a tremendous impact on investment banking. Elsewhere, trading desks were also hit by the weak commodity prices,” he told The Straits Times.

“We’ve had a somewhat better start this year with the stock market on a good run, but financial institutions are still reeling from last year’s impact. The main industry theme now is caution – and if they need to fire to manage costs, they will fire. This has always been a very brutal industry.”

GLOOMY YEAR AHEAD

What happened at CIMB was part of a bigger story that has spooked Singapore of late.

As news of layoffs by international banks – from Royal Bank of Scotland, Barclays to Standard Chartered, among others – continued to grab headlines in the past year, the anxiety around the future of one of the nation’s key industries has also deepened.

The troubling questions extend beyond the industry. Is the financial services sector facing a decline? If so, how long will it last and what does it mean for Singapore’s economy and employment opportunities more generally?

In the near term, the worry is certainly justified, DBS economist Irvin Seah said. “The downside risks for the financial sector are rising, due to the challenging external environment. The slowdown in China is having a broad-based impact on Singapore, and any interest rate hike by the Federal Reserve will also rock the financial markets.

“Domestically, Singapore’s dimmer growth outlook means companies are less willing to expand, hence less demand for loans. It doesn’t help that the property market is still cooling,” he said.

Bank loans shrank 1.2 per cent year-on-year in January, the weakest showing since March 2000, Seah noted as he warned of a “gloomy” outlook this year for the sector.

The headwinds are well understood by the major financial institutions here, with all three local banks – DBS Group Holdings, OCBC and United Overseas Bank – expecting only low single-digit growth in loans this year.

Plunging oil prices have also stirred up market fear over a potential asset-quality crisis, due to the banks’ considerable loan-book exposure to the struggling energy and offshore marine industries.

Talk of a banking crisis has irked DBS chief executive Piyush Gupta who, at a results briefing last month, said people are “misinformed” on the matter, before admitting that the bank will slow down on both hiring and senior staff wage growth this year.

A KEYSTONE FOR ECONOMY

How well the industry grows after a bumpy 2015 will have a decisive impact on Singapore’s economic outlook.

The finance and insurance sector may only be about 13 per cent of the economy in terms of nominal value-add to gross domestic product (GDP), but at a time when the nation is feeling the pressure of a prolonged manufacturing recession, it is now one of the biggest growth drivers, contributing to 25 to 30 per cent of GDP growth in the past four years, Seah said.

And despite all the grim tidings last year, finance and insurance still grew 5.3 per cent year-on-year, down from 2014’s 7.7 per cent but still the second highest behind only the 6.1 per cent growth notched up in the wholesale and retail trade sector, Ministry of Trade and Industry data showed.

In comparison, manufacturing – some 20 per cent of the economy – suffered a sharp reversal from growing 2.6 per cent in 2014 to shrinking 5.2 per cent last year.

That means finance and insurance chipped in about one-third – 0.7 percentage point – of Singapore’s total 2 per cent growth last year; it is an economic cornerstone the nation can ill-afford to lose.

The sector will be resilient enough to play that role in the long term, helped by Asia’s status as an investment destination, a Monetary Authority of Singapore spokesman said.

“Structural factors such as the longer-term rise of wealth in the region and Asia’s relatively lower insurance penetration rate among advanced economies should help to keep activities in these segments on an expansionary trajectory. The large demand for infrastructure in Asia will also drive growth in infrastructure financing and investment,” he said.

Against that backdrop, growth will come from areas such as corporate banking, project finance, fund management and insurance industries, the spokesman added.

NEW GROWTH AREAS

In other words, while the “low-hanging fruits” for growth are disappearing, the slowdown is not industrywide, with many segments still on track for growth, Singapore Management University finance professor Annie Koh said.

“In what I call the vanilla banking segment, where the daily bread- and-butter of loans and deposits business takes place, consolidation will continue.

“But I think the ’middle segment’ can thrive. This is where you facilitate the cross-border wealth and trade. With the Trans-Pacific Partnership and Asean Economic Community taking shape, I see a huge potential for Singapore, as an established trading hub in Asia, to play a big role in this space, to be the hub for wealth management and trade financing.”

This is why some operators, such as Manulife Asset Management (MAM), remain bullish even as other financial institutions cut down their presence in Singapore.

MAM Singapore chief executive Wendy Lim said: “The asset-management industry in Singapore has been expanding steadily in recent years at 14 per cent compound annual growth rate over the last five years… For Manulife, we are pleased to see a faster growth than that of the industry.

“We see tremendous growth potential in Singapore, given that it is a key wealth-management hub in the Asia-Pacific, its strong local talent pool and excellent regulatory infrastructure,” Lim noted, adding that MAM plans to expand its Singapore team this year.

UOB is also at ease with its own outlook, despite a 1.2 per cent year-on-year drop in 2015 net profit – the weakest performance among the three local banks.

“The financial markets are expected to stay volatile this year but we believe this is part of an economic cycle. Singapore’s financial services sector is sound and has the resilience to manage the impact from the global economic slowdown,” chief financial officer Lee Wai Fai said.

“From Singapore, UOB has built over the decades an extensive Asian network, which has given us an edge in facilitating rising cross-border trade and investment. Singapore will continue to be the base where we support our clients’ investments,” Lee added.

Acting Director of the provincial Department of External Relations Nguyen Hoàng Long said the event enabled local businesses to welcome a wave of investment from European partners since the EU-Vietnam Free Trade Agreement (EVFTA) was signed in 2015.

He said the Ministry of Foreign Affairs was willing to act as a bridge between the two business communities.

According to the provincial Department of Planning and Investment, local businesses exported over US$370 million worth of goods to the European market in 2015.

European countries are running 19 projects worth nearly $24 million in the province, making up around 2.4 per cent of the total foreign direct investment (FDI).

Lying at the heart of the south-central coastal region, Khánh Hòa boasts great potential in marine economy, especially sea and island tourism and transport services.

Nha Trang, Vân Phong and Cam Ranh Bays are regarded as three key economic regions in the province, which are appealing for foreign investment in various fields such as tourism, services, and industry.

Authorities have been applying preferential policies for overseas investors.

Representatives from the European Chamber of Commerce (EuroCham) in Vietnam spoke at length about the EVFTA, as well as a project to support European small- and medium-sized enterprises (SMEs) with regard to intellectual property in Southeast Asia.