Today,the day of 25th January. For most people its the eve of Chinese New Year, but for me I clearly tell you its the dawn of a new era.Why am I raising this question?The simple thought of the financial crisis causes me to ponder for a long time.I decided to post this blog entry after a thorough analysis of the 2009 Budget for Singapore.Therefore,I say that 2009 poses to not only me but to others in the world as the beginning of a so-called millennium.Its a time we have to gather courage and fight the obstacles that come our way.Its a time to be resilient and focus on the priorities first.Now or first approach of analysis would be why the Singapore Government decided to release its budget earlier than its expected release in mid-March.If we tackle this question with a sensible and practical approach rather than a theoretical approach,we would find a vast difference.As we know, Chinese New Year is around the corner.This also marks the 1st festive season of the year 2009.After this CNY, companies are expected to have a mass retrenchment exercise.After all in the daily news we hear of people losing their jobs day by day. Recently, IBM retrenched 3000 workers while computer giant,Microsoft reduced its work capacity by 5000.Another 1000 were practically discarded from Sun Micro systems.Intel, on the other hand retrenched a whopping 6000 from South East Asia and USA.With all these evidence, where will we go??What will we do???Imagine the pain we will have to suffer if this continues.That's were the Budget of 2009 comes in to help us survive the risk of falling into a 3rd world or a developing country.
Firstly, I think it is of utmost importance that we understand the cause of all the problems up till today.What was it that caused this upheaval amongst us???Without the basic understanding of this huge problem, its a miracle to understand the rest of the story.
It just triggered with the failure of companies evolving into a major ground hole in the natural life of over 6 billion people and gradually deflation.Sept 7 2008, USA's two largest mortgage finance lenders came under scrutiny at the hands of Congress, the Justice Department.The Federal National Mortgage Association,Fannie Mae, and the Federal Home Mortgage Corporation,Freddie Mac were government sponsored enterprises (GSEs). Although both companies are privately owned and managed by shareholders, they are protected financially by the support of the Federal Government. With Fannie Mae and Freddie Mac being the only 2 Fortune 500 companies not required to inform the public about any financial difficulties citizens of USA taxpayers could be held responsible for hundreds of billions of dollars in outstanding debts. A recent investigation by the Justice Department revealed accounting errors in the amount of 4.5 to 4.7 billion dollars and resulted in the termination of three of the company's top executives. Sept 14 2008:Lehman Brothers Holdings Inc.,a global financial-services company that did business in investment banking,trading etc. collapsed and filed for bankruptcy of over 600 billion dollars that accounts to the largest filing of bankruptcy in USA.This in turn caused the stock values such as Straits Times Index,NYSE,Silicon Valley,Hansei and even the Sensex to lower its value.With all this problems, it caused strong currencies such as the yen,Swiss Franc and the dollar to decrease largely.
So now this year's budget gives us the chance to catch up with our economy.In the financial year ahead there are mainly 5 aspects take care of of:
-Jobs for Singaporeans-5.1 billion
-Stimulating Bank Loans- 5.8billion
-Supporting Families-2.6 billion
-Education & Healthcare-4.4 billion
-Enhancing Cash-flow to prevent bankcruptcy-2.6 billion
All this is added upto a total of 20.5 billion dollars.For the first time in this history of Singapore, the government has dipped into its reserves and plucked out money from it that accounts to about 5 milion due to this decline, the worst for 60 years.The revised Overall Budget Balance for the financial yeat of 2009 is a deficit of $8.7 billion (3.5% of Gross Domestic Product). The Basic Balance, which excludes the transfers to endowment funds as well as the contributions from Net Investment Returns, is a deficit of $14.9 billion constituting 6.0% of GDP, imparting a large fiscal boost to the economy this year. Thus,we can easily understand that this would give a particular boost to the Singapore economy.
So all I have to say is get geared for a wild adventure with the badly affected economic cash crunch...
With High HOPES For The Future,
Sanjeev Menon
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