Singapore, Malaysia face economic hit from prolonged haze

Singapore, Malaysia face economic hit from prolonged haze

SINGAPORE - Singapore and Malaysia could face a bigger economic impact than from their worst air pollution crisis 16 years ago if slash-and-burn fires in Indonesia continue to rage in the coming weeks, turning off tourists and raising business costs.

Restaurants, tourist attractions and some other businesses are already feeling the pain as haze envelopes the Southeast Asian neighbours, from Singapore's upscale shopping districts to Malaysia's popular beach resorts.

The haze crisis in 1997 lasted about three months and cost Southeast Asia an estimated $9 billion from disruptions to air travel, health expenses and other business impacts. Economists and businesses say the costs are already mounting about a week since air pollution levels in the countries shot up to unhealthy and sometimes hazardous levels.

"The haze has definitely affected our business. Our sales fell around 40 per cent in the past week," said Goo Wai Chien, who sells pizza and pasta at a hawker centre in Singapore's business district. "But hopefully the situation is improving."

Much depends on how long the haze lasts and which way the wind blows the smoke that is coming mostly from fires set on palm oil plantations on Indonesia's Sumatra island.

Singapore Prime Minister Lee Hsien Loong has said the haze, which eased over the weekend and on Monday in the city state, could last a few weeks or until the dry season ends in Sumatra in September or October.

Extinguishing the fires, which smoulder deep within peat, depends almost entirely on levels of rainfall.

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