Singapore General Elections Held Before 9/8/15?

Conventional wisdom is that the next GE will be held after the 50th anniversary celebrations of S’pore’s independence which will be a celebration of all things PAP. So the Oppo parties are not gearing up for an early GE (end of this yr or before Aug 9 next yr.)

And this piece of news doesn’t disturb the narrative:With the January 2017 deadline for the next General Election looming closer, the Elections Department (ELD) has been calling up public servants for training to be election officials, as part of the electoral process … , the ELD said in an emailed statement: “ELD prepares and organises the Public Service to conduct elections in Singapore. Amongst other work, ELD selects and trains public officers on an ongoing basis to perform election duties during an election.” (CNA 17 October)

There have been early training sessions before with no elections following. The conducting of training sessions is a lousy leading indicator.

But think about the economic prospects of S’pore  and the training could be a sign of early elections.

No govt wants to hold a general election in a recession or when a a recession is likely. Already the growth rates for this yr and next yr have had to be trimmed because the global economy isn’t doing too well.

And things could get worse: The global economy is in a woeful state [Skip the next few paras if pressed for time or an illiterate in finance and economics]. The euro zone, fully 17% of global GDP, is predicted to expand just 0.8% in 2014 according to the IMF. China and Japan, together 25% of global GDP, are slowing. Emerging markets are floundering: a report on the synchronised slowdown from the Fund puts much of it down to weak trading partners (a sort of trade contagion). As the world slows, America seems a prudent place to park cash. Chinese and Japanese holdings of US Treasury bonds—now $2.5 trillion—have doubled in five years, according to the TIC data.

… the euro area. Inflation is just 0.3% and the area is already awash with unemployed workers … end up with both fiscal and monetary policy being relatively tight.

What would happen next? American exporters would get hit twice—first by weak demand from abroad, then as their goods get pricier for foreigners to buy as the dollar continues to rise. But since America is a relatively closed economy, the impact abroad could be bigger. The big risk is that a runaway dollar topples emerging-market economies just as it did in the 1980s and 1990s. A pessimist would argue that many of the conditions now are exactly as they were then. Many emerging markets borrow by issuing bonds in dollars, rather than their own currency. Appetite for these higher-yielding dollar bonds has been strong in recent years: in January 2014 Indonesia issued its largest dollar bond since 1998; according to its Finance Ministry data, India has dollar debts of around $273 billion (15% of GDP). As the dollar rises, the local-currency cost of these debts goes up.

Floating exchange rates make things a little different when compared to the Asian crisis, but would not help that much. Take a country like Brazil, which has inflation of 6.75% (see the WSJ on this) and yet an economy in recession. If its currency continues to depreciate against the dollar then inflation builds up further. The central bank ends up in a bind: raise rates to cut inflation and stem the depreciation, or keep rates low to get the economy back on track. Both paths would be risky, and could cause a wider stress if the contagion of previous emerging-market crises is any guide.

With any luck none of this will happen. But it all could happen. And if you are in the business of forecasting and stress testing, you should prepare for the worst.

http://www.economist.com/blogs/freeexchange/2014/10/pessimistic-forecast