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Hazy outlook for the Lion City

Singapore smog worst in ten years

Singapore has been hit by the haze: the annual smog caused by forest fires in neighbouring Indonesia is the worst for 10 years and is causing more than just gloomy skies. As the pollution index has hit the unhealthy level, concerns are increasing that the smog might cause health problems not just for its residents but for the economy as a whole.

Tourism already accounts for about 5% of GDP and brings in more than $6 billion annually. The government has ambitious plans to triple tourism receipts within 10 years, including the development of two enormous gambling and hotel developments, euphemistically dubbed integrated resorts.

The local economy had already begun humming from the expected surge in investment in the resorts and the anticipated increase in tourism, especially among the lucrative mainland Chinese market. Property prices, long stagnant, have started to move and the economy looks set to grow at a sprightly pace in 2006.

The long-term effects on the economy of the smog that hits Singapore at the same time every year are, like the skyline, unclear. In fact, the Lion City has more recently been a beneficiary of polluted skies: those over southern China.

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