Singapore's economy starts to choke on Indonesia smoke

Singapore's economy starts to choke on Indonesia smoke

SINGAPORE - The severe smog over Singapore caused by forest fires in Indonesia could hurt the city-state's economy if it persists for weeks, economists said Friday as the pollution index hit new record levels.

Tourist spots are shutting down, companies are allowing staff to work from home and a VIP airport has suspended operations. Some Singapore restaurants were almost deserted during the normally busy Friday lunch period.

As thick grey smoke and the acrid smell of burning wood and grass smothered the city-state for a fifth day running, economists said tourism in particular could suffer from Singapore's worst environmental emergency since the 1997 haze crisis.

Singapore Prime Minister Lee Hsien Loong said Thursday that the problem "can easily last for several weeks, and quite possibly longer until the dry season ends in Sumatra".

The season lasts from June to September.

"The impact on Singapore from the Indonesian haze is particularly severe this year, and could become worse than 1997," said Rajiv Biswas, Asia Pacific chief economist at research firm IHS Global Insight.

"If the haze persists over the coming weeks during the seasonal slash-and-burn period in Sumatra, it has the potential to have significant negative effects on the Singapore economy.

"Images of the haze enveloping Singapore are being widely reported on TV channels and other media globally, and can be particularly damaging to Singapore's world-class tourism industry."

Tourism is a revenue-spinner for Singapore, a tiny city-state that has designed itself as a regional hub for everything from hosting conventions to managing the wealth of the world's millionaires.

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