While Singapore government spokesman have been generally upfront over the past 2 years that consumer spending power will decline in the immediate future in the wake of global financial problems and increased competitiveness from their neighbours and China, many privately express heightened concerns and concerns that span more distant horizons.

In terms of strategic industries, biotech and high value IT are targeted, but these are also the targets of others - like New Zealand and Malaysia, as well as China to name just a few. Competitive advantage is becoming a harder betel nut to crack..

In short a Singapore economy that weathered the Asian financial crisis with some aplomb, riding on their higher inter-connectedness with a healthier global economy than their regional neighbours at the time, has been brought down to earth as the global economy began to fracture since 2000. But more significant has been the moribund, or indeed falling Singapore economic prospects during the nascent upturn in US (and to a lesser extent European) economies in the last 6 weeks. In short, Singapore's economy has not caught on to the coat-tails of signs of global recovery as it has in the past.

Singapore has only a few million consumers, yet their spending power and affection for consumerism has made them a relatively strong consumer market for targeted products and services compared to the much larger (in terms of population) consumer markets in Malaysia, Indonesia and Thailand. Yet there are few pragmatists that now believe that Singapore can ever attain the heights of economic and consumer spending growth achieved in the latter quarter of the previous century.

At the time of writing, unemployment in Singapore is a major concern, and while social security in Singapore has always been delivered from family networks (all of Chinese, Malay and Indian) stresses are starting to show. Layoffs and decreased corporate profits have seen salaries decrease as well. If you have ever marvelled at the communication skills of your Singapore taxi driver of late, it's probably because he was originally a small entrepreneur or a recently laid-off middle manager of a large MNC or Singapore company. The cash liquidity in families which has allowed them to support temporarily unemployed family members, and at high levels to ensure the clan does not lose face, is gradually drying up as well.

Tourism is now one of the top of the priorities again, always a high priority of Singapore's high quality modern service and travel hub brand, but traditionally a mainstay of developing countries.

But most obvious is the economy. Today Singapore's STI, their stock market composite index, is continuing their substantive fall over the recent past. Two days ago, Singapore reduced it's GDP forecast from 3 to 4% to 2 to 2.5%, citing US slowdown, and Iraqi war fears. New consumption taxes announced earlier this year kick in in January 2003, imposing an increase from 3% to 5% for Singapore consumers. And while the government may have been hoping for consumers to go for a last minute spending splurge at 3%, there is little evidence of it leading into the holiday periods of Christmas and Hari Raya, and Chinese New Year is still a fair way off. There is a caution in consumer spending that uncharacteristically for this market is resulting in a "maybe buy later at 5%" taxes, rather than "buy now with an unknown future at 3%".

The first chatter of a double-dip recession (the first short lived but significant recession ending theoretically in the second quarter this year), a prospect that dare not speak it's name mid year, is starting to dominate in coffee shops and government offices throughout the Republic. GDP decreased 10.1% against the second quarter on an annual basis. Manufacturing output dived 27.2% in the third quarter, failing to build on a 51.6% rise in the second. The consumer price index fell 0.4% in the third quarter.

Singapore has been a model of national strategic planning, a talent that drove its growth in mid last century and provided a buttress against regional problems in the last decade. But the strategic plan is running out of options fast with the rise of China and the improving competitiveness of neighbouring economies. Already a war against Iraq has been factored into the strategic planners equations - namely a drop in GDP of .03% according to two reliable sources.

There is only one real known in the whole equation. ..And that is that Singapore consumer spending power must continue to decline in future. The first era of the mainstream conspicuous Singapore consumer is well and truly dead. Thank God that Singapore has a new cultural centre. For many Singaporeans will need a different way to get their kicks in future than shopping till they drop, if indeed they can afford the outrageous show prices.

Despite this however, it is important to remember that any decrease in consumer spending is from a high level. Singaporean consumers discretionary income is way in front of consumers from neighbouring countries in large degree. But at the least we would expect the gap between Malaysian and Singapore consumers in dicretionary income to lessen in the next few years, though of course Malaysia has their own economic and financial problems and a more volatile economic and business environment.

Singapore will remain a highly profitable consumer market, but targeting, and attendance to competitive pricing decisions will become more important than ever. Packaging and marketing spin, as Richard Branson's failed entry into the Singapore telco market demonstrated early, is no longer enough.