I used to feel Singapore economy is less stable than North America, Japan and Western Europe. Even a small European economy like Belgium or Finland is in a safer position than Singapore because it’s a stable, integral part of a large, strong ecosystem. These western economies have experienced relatively low or negative growth, persistent unemployment, high national debt, aging population, diminishing manufacturing competitiveness under competition from emerging economies, …. but "strong" means they can withstand bigger adversities longer. Strong means economic competitive advantage over the developing countries.
Now I see signs of U.S. economic status in decline. However, positive signs are still visible — in high tech, new/old media, life science, aerospace, innovation, advanced R&D, energy, material science…. I feel the next 10 years may see further decline in USD and U.S. GDP relative to rest of the world.
In contrast, over 30 years, I feel S’pore is still too small to be strong. S’pore government has to make all the right decisions to avoid the many potential disasters (i won’t list them). Being small, I feel S’pore would suffer quite badly from even a mild misstep. (Sorry no specific examples.)
For big or small economies, every country needs to stay competitive and stay relevant, and identify new growth sectors every 20 years. Just witness the current decline of Nokia and BlackBerry. Nortel is another high-tech example — once the biggest company in Canada. Creative Technology, DEC too. I guess AOL is another cautionary tale of staying relevant. The software industry is even more unforgiving and littered with even more dinosaurs compared to hardware or telecom industries.
Perhaps Singapore would fall on a similar path, but there’s opportunity of renewal…
For a big country like the U.S., renewal seems inevitable. Is there a major sector in U.S. economy that may decline and never recover again? Maybe the railway, steel and garment industries of the past?