A few days ago I was talking to a foreign friend when he said something that I can't help but find to be very true.
We were talking when the talk went almost inevitably into how bad the economy is. My foreign friend was surprised by how resistant Singaporeans are to lowing prices and cutting rent. In his country when they go into a recession, it is the norm that shops lower the prices and landlords reduced the rent. It’s shocking to him that landlords in Singapore would rather let their shops be empty than lower the rent like the case in Orchard Road.
When I mentioned to him that there are discounts in the shops and some landlords like NParks are giving rebates, his words were, “My point exactly.” In his view, giving discounts and rent rebates is the wrong way to go. Discounts and rebates means that the prices have not changed (has not went down), and discounts and rebates can easily be cancelled which meant that they do not give the same amount of confidence as a lowering of prices will.
When I then mentioned that it’s easier for the business when the economy turn around to just cancel the rebates than to raise prices. My friend then went into a rant about how there is no evidence that the economy will turn anytime soon. In fact the evidence is scant that the economy will turn even in 2010 which will be 9 months away. To my friend, the landlords (and government) in Singapore are just ‘hoping’ for a turn in the economy without any evidence to justified their hope.
So what did my friend said that rang so true to me? “Singaporeans (government, business, people) are so used to success that they seems to have no idea what to do in a severe downturn”