Impact of bad air on economy 'difficult to quantify'

Indonesian students crossing the Ogan River on a wooden boat in the haze as they head to their school in Palembang, South Sumatra, yesterday.
Indonesian students crossing the Ogan River on a wooden boat in the haze as they head to their school in Palembang, South Sumatra, yesterday.PHOTO: EUROPEAN PRESSPHOTO AGENCY

The haze has affected some outdoor leisure venues but the already weak tourism sector, coupled with the bleak global outlook, mean the direct cost to the economy of the bad air will be hard to measure.

Inbound tourist numbers have been trending down since 2013 for many reasons so the "incremental impact" of visitors opting to go elsewhere just to avoid the haze will be hard to ascertain, said UOB economist Francis Tan.

Other costs may only become apparent further down the road.

The haze cloud was slow to reach Singapore this year, wrongfooting those who had expected the skies to go dark in July or last month, like in previous years.

 
 
 
 

"They're caught by surprise this time, but if people learn from this episode, and if the haze prolongs to the end of this month, both tourists and Singaporeans could start planning (to get) away from Singapore for the whole July to September period (next year)," said Nanyang Technological University economist Euston Quah.

MOOD DAMPENER

It affects our mood and definitely affects productivity.

PROFESSOR EUSTON QUAH, Nanyang Technological University economist, warning that a prolonged haze would be a blow to output

A prolonged haze spell is likely. The south-west monsoon, which has been carrying smoke from the burning peatlands in Sumatra to Singapore, is expected to last until late next month, the National Environment Agency said on Tuesday.

Even so, experts are not worried that the annual haze may taint Singapore's reputation as a "clean and green" destination. "They know it's not our fault, that this is a transboundary issue and not due to Singapore being less efficient," said Professor Quah, noting Singapore has also taken active steps to manage the problem over the years.

It is also fortunate that the forecast is for haze conditions to lighten up this weekend, just as the country plays host to the Formula One Grand Prix and Singapore Summit economic forum.

Experts agree that this year's haze - which has been around for two weeks - will have very little impact on the economy, unless conditions deteriorate. "A lot of the industries are haze-immune," said Mr Tan, noting that most of the workforce operates indoors.

But with many already complaining of raspy throats and itching eyes, Prof Quah warned that a prolonged haze would be a blow to output. "It affects our mood and definitely affects productivity," he said.

A version of this article appeared in the print edition of The Straits Times on September 17, 2015, with the headline 'Impact of bad air on economy 'difficult to quantify''. Print Edition | Subscribe