SINGAPORE -- Singapore's pro-business People's Action Party may have maintained its uninterrupted grip on power in last week's hotly contested election, but for many businesses the relief was short-lived.
Preliminary data on Tuesday showed that Singapore's economy shrank 12.6% on year in the April-June quarter due to the COVID-19 pandemic, with no sign of an end to the crisis.
"The new parliament must be able to diagnose and sift out the good and the bad policies, and just implement the better ones," Willy Koh, CEO of Singaporean medical technology manufacturer Racer Technology told the Nikkei Asian Review.
Singapore's Workers' Party won 10 of 93 seats in parliament in Friday's general election, a historic leap for the country's biggest opposition party which won seat totals in the double-digits for the first time since independence in 1965. Still, the PAP's 83 seats gives it a parliamentary supermajority, with the power to push through laws and constitutional changes as it sees fit.
Koh expects the PAP to keep carrying on as before, but the future looks anything but normal for Racer Technology, which is expected to rack up SG$1.5 million in bad debts this year, as business partners overseas failed to make good on payments.
"Of course, they [the PAP] cannot satisfy everyone, but they must be smart enough to know which are the priorities," Koh added.
Koh's concerns mirror those of others in the wider business community, where excitement over the city-state's election is starting to fade and companies want the real work of helping business survive the pandemic to carry on.
"Stability and continuity are quite important for businesses," Kurt Wee, president of the Association of Small and Medium Enterprises in Singapore, which represents over 11,000 companies, told Nikkei.
"Now what is important is for business and government and the workforce to regroup and face the second half of the year from July to December -- we've got a much bigger enemy which is the coronavirus pandemic," he said.
While the political debate is expected to be robust with more dissenting voices, the PAP's tight grip on the levers of power will be a comfort to many businesses that appreciate such stability and predictability.
"The business community welcomes the election result because there is every likelihood of policy continuity," Victor Mills, chief executive of the Singapore International Chamber of Commerce, told Nikkei.
Representing around 600 local and foreign companies, Mills said the PAP's election win will help maintain confidence in Singapore as a business hub.
"The more perceptive business people know this was a watershed election," said Mills. "The big winner is the Workers' Party which has broadened its appeal."
Observers have already said that Singapore should continue to retain its standing as an investment hub with its brand of stable politics relative to elsewhere.
OCBC Investment Research analyst Chu Peng noted in a report that the PAP's clear mandate would provide post-election policy continuity "with jobs protection and creations, handling of COVID-19, and economic recovery plans remaining in focus."
Singapore's financial markets also reacted with little fanfare to the general election results. Shares rose as the benchmark Straits Times Index opened 0.5% higher at the start of the trading day after the vote.
Paul Chew, head of research at Phillip Securities Research, told Nikkei that historically, Singapore's stock market is little influenced by the country's election results.
"Ultimately, the market is more focused on other developments, such as the pandemic, probably how the economy is doing rather than the (election) results, unless it is a really extreme outcome," he said.
One surprise was the defeat for Ng Chee Meng, minister in the Prime Minister's Office and head of Singapore's National Trades Union Congress.
"Regardless of the leadership changes within the government, we do not foresee any changes to the cooperation between workers, businesses and government to keep unemployment low," Ho Meng Kit, chief executive of the Singapore Business Federation, which represents over 27,000 companies, told Nikkei.
Business groups are keeping their eyes trained on Lee's designated successor, Finance Minister Heng Swee Keat, and his team of so-called fourth generation political leaders.
Thilan Wickramasinghe, head of research at Maybank Kim Eng Singapore, noted in a report that while the PAP retained a strong majority fresh off the election, it had ceded ground in terms of vote share and opposition presence in the new parliament.
"Near term, there is unlikely to be major policy divergence, but over the medium term this may provide the incoming '4G [fourth generation] leadership' opportunities for structural reform," Wickramasinghe said.