The 1998 financial crisis, the Internet bubble and the 2008 mortgage crisis helped the Singaporean economy to become more agile and less vulnerable to economic downturns.
The Asian economy was not yet recovering from the 1998 crisis when the dotcom bubble hit in 2000. SARS outbreak in 2003 further added to the economic burden, driving away tourists and weakening consumer confidence. Then came the 2008 mortgage crisis which had ripple effects across the globe. Nonetheless, there is a positive side in these events that makes Singapore more of a winner than a helpless victim. Economic policies were made more responsive to market cycles and the economic structure underwent a major revamp.
Through the years, there has been a stable influx of foreign direct investments (FDI) to Singapore. In 2007, FDI totaled $348 billion, compared to $165 billion in 1998. This was attributed to business-friendly measures, including the removal of capital gains tax and reduction of dividend and interest taxes.
The real estate market also benefited from FDI influx. Property investments totaled $43 billion in 2007, compare to $15 billion in 1997. Singapore has been attracting REIT investments following the issuance of property trust guidelines in 1999. Today, Singapore has 20 REITs backed by various properties across Asia. Another proof of economic resiliency is the growth of the foreign-owned residential property market. Easing foreign ownership restrictions led to 64% market expansion.
But still, the current global recession has hurt Singapore just like other developed markets. Nevertheless, right economic planning and the pro-business mindset of the government have been opening market opportunities and expediting market recovery.