ON FRIDAY afternoon, Prime Minister Lee Hsien Loong effectively put the nation on notice that significantly stricter measures will kick in next Tuesday when most of Singapore's workforce will need to stay home for at least a month.
Schools and institutes of higher learning will shift to full home-based learning, starting next Wednesday, while preschools and student care centres will suspend services.
While PM Lee did not say "lockdown" in his speech, the closure of most workplaces, save essential services like food establishments, healthcare, supermarkets and markets (including SGX), transport, utilities and banking, certainly seems like it. Countries from China to Italy have imposed similar measures in varying degrees to curb the spread of the pandemic.
Clearly, earlier calls to practise social distancing and other measures have not prevented Covid-19 from spreading. The virus now resides within the community and requires the government to impose significantly stricter measures to pre-empt escalating infections.
For now, the hospital capacity is still able to cope with the rising number of cases. But the government is not prepared to wait until the numbers surge to make its move. Hence, the unprecedented circuit breaker - a risky attempt to control the virus that may or may not work, but will at least buy Singapore more time.
For a small, open economy like Singapore, which relies heavily on trade, it is inevitable that the unfolding global healthcare crisis has an amplified impact on the fear factor among residents. From an economic point of view, the concern then is how this fear among the residents could compound the escalation of defaults for borrowers?
If there is minimal external demand, and if residents are disciplined and adhere to the government's call to limit physical interaction, businesses will be significantly impacted. Also, not all businesses are integrated with the digital world or have online platforms. These, unfortunately, will see their revenues hit the hardest.
A nationwide movement restriction order could also have implications for some retailers. While most retail leases do not have a clause that allows a landlord to stop collecting rent on a lockdown, some may have a general force majeure clause which could be relied on. For tenants staring down the abyss, some may not have to keep stores open, which they may be contractually obliged to otherwise.
There is a need to find a balance when mulling the implementation of more stringent restrictions, or even a lockdown. Such moves can fuel panic and fear, and lead to a self-fulfilling economic depression.
So far, the Singapore government has been very prudent and measured in its decisions. On Monday in Parliament, DPM Heng Swee Keat will announce additional support for households and businesses, over and above what was provided in the two earlier Budgets. It will also legislate to require landlords to pass on property tax rebates fully to their tenants. All will go a long way to containing damage of cascading effect on the economy.
One can expect Mr Heng's announcements on Monday to echo the government's central message to help businesses retain their workers.
Fresh measures must be more broadbasedand holistic to help companies support and retain workers. They should include broad-based relief measures and subsidies that go beyond wage subsidies for the most vulnerable or suspending Electronic Road Pricing charges.
This is essential because the pandemic has not only hit specific sectors like aviation, tourism, hospitality and retail, but its impact has been amplified painfully throughout the entire economy.
What we are facing today is the worst global crisis since World War II - an economic tsunami - which threatens to overwhelm the economy. If fresh measures are not broadbased, even the digital services providers which now support working from home, home-based learning and e-commerce, may be dragged down too. This must be avoided.