Singapore’s Prime Minister Lee Hsien Loong said that there the Russia–Ukraine war is having a far-reaching impact worldwide, including Singapore, and that Singaporeans are already feeling the impact of the war on the cost of living.
‘No Good Outcome in Sight’
During his speech, Lee said that as the war continues, there is “no good outcome in sight.” As the Ukrainians are defending themselves better than expected, the Russians are unlikely to swiftly defeat them, Lee said. However, neither can the Ukrainians expel the Russians from their territory as they are outnumbered.“So the fighting will likely go on for quite a while longer, and the stakes are rising,” said Lee.
“Russia now sees this not just as a fight in Ukraine, but as a struggle against many Western countries. It has accused Western countries of conducting a proxy war against it,” he said, pointing out that the United States is aiming to weaken Russia’s military capabilities to prevent Moscow from invading other countries in the future.
“If the war spreads beyond Ukraine’s borders, or if unconventional weapons are used, no one will be able to control how the situation unfolds. This is deeply, deeply worrying,” Lee said, adding that Russia has warned of a real danger of World War III.
Lee pointed out that what was most fundamental is that Russia’s attack on Ukraine has undermined the global order—the basic rules and norms for countries, big or small—to interact properly with one another.
Singaporeans Are Facing Higher Costs of Living Due to the War
In his speech, Lee also explained that inflation was already a problem for many countries even before the Russia–Ukraine war, but the war has made it worse.“Russia is a major exporter of oil and gas. Now that supply is being disrupted, European countries are trying to stop buying energy from Russia and Russia is also cutting off supplies to punish European countries for supporting Ukraine, and that is causing a worldwide energy crunch. That is why our electricity and petrol prices have gone up sharply.”
“Food prices have gone up too. Ukraine is among the world’s largest exporters of cereal crops (like wheat, maize, barley) and vegetable oils. Because of the war, the Ukrainian farmers are running short of seeds, fertilizers, and even fuel for their tractors, that is assuming they can even tend their fields and farm at all. This has disrupted global food supplies and pushed food prices up, which is why our bread prices have gone up in Singapore for example.”
However, the Singapore government is implementing measures to cushion the impact on everyday Singaporeans and alleviate the cost-of-living pressures, Lee said. This includes rebates and vouchers handed out to households, and a tightened monetary policy to reduce imported inflation.
Lee further said, “All this will help, but we must be prepared for more economic challenges in the year ahead. Inflation will remain high. Central banks in the developed countries are tightening their monetary policies, raising interest rates. Global growth will be weaker, and there may be a recession within the next two years.”
According to the Ministry of Trade and Industry’s (MTI) estimates, Singapore will be paying SGD$8 billion a year in energy costs, “that is 1.5% of our GDP. That means that in Singapore, we have become collectively S$8 bn poorer off every year. There is no escape from this,” Lee said.
“In the short term, government support schemes will help to share the burden fairly, and ease the hardship on households but in the long term, this does not really solve the problem. We can share the burden, but the burden is still upon us,” he said.
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