The PAP had the slimmest of margins since 1963, capturing 60.1% of valid votes, but they did manage to retain 81 out of the 87 seats in Parliament. The loss of the Aljunied GRC helmed by BG George Yeo who was our Minister for Foreign Affairs is perhaps the biggest setback for the PAP. However, politics aside, to me at least, losing Aljunied GRC would not derail Singapore's economy. Nor would it affect the local stock market adversely.
There is no doubt in my mind that Singapore's economic miracle since independence is the result of the astute leadership by the PAP and their founding members like Mr. Lee Kuan Yew and Dr. Goh Keng Swee. Over the decades, the economy strengthened, the country prospered and the people's lives improved under the leadership of Mr. Goh Chok Tong and Mr. Lee Hsien Loong in their terms as Prime Ministers. Things have definitely changed for the better over the decades but, in the last couple of years, a mood of discontent became more evident.
This General Election was a very emotional one and the electorate have sent a strong signal to the PAP that not everything is well. When did things start to change? If the election had taken place right after the recovery from the global financial crisis in 2009, I am willing to hazard a guess that the PAP would have done better, being responsible for myriad ideas like the Job Credits which helped to keep hundreds of thousands of Singaporeans employed during the depths of the crisis. Human beings have a short memory and a focus on the immediate is quite normal.
So, has the PAP fallen short? I would say that their position weakened as they did not keep up with the changes on the ground. In so many aspects of life, change is the only constant. Ignore change and we become irrelevant. It is either we change together and stay relevant or we get left behind. I certainly hope that the PAP learn from this experience and emerge a stronger and more sensitive government.
We are investors and, naturally, we are concerned about the economy and continuing prosperity of the country. We have vested interests. The PAP has been good for the economy of Singapore. Will the investment community lose confidence in the Singapore economy because the PAP has lost a GRC? I do not think so.
The PAP's leadership over the decades transformed Singapore into a small economic powerhouse but Singapore's domestic economy remains very small (yes, even with five million people living and working here) and we are more affected by externalities. Our economy remains very open and vulnerable to externalities. If the stock market should suffer a decline, more likely than not, it would be because of some global shifts in liquidity or fundamentals. Soon, GE 2011 would just be a memory and I would not dwell on or read too much into the results.