Speaking at the IMAS-Bloomberg Investment Conference on 9 March 2022, Mr Tharman, who is also MAS Chairman, said investing for the future has become a much more complex game, more complex than it was pre-pandemic, and also more complex than it was two weeks ago.
“I would describe it as a ‘perfect long storm’, shaped by the confluence of several forces,” he said.
A period of heightened and likely prolonged geopolitical insecurity
The risk of stagflation
A 5-6% inflation can be a very demoralising experience because a large part of the populations in the world are now older, and middle aged workers tend to have wages that tend to stay flat, while a large part of the retiree population is on fixed nominal incomes.
This will complicate the task of governments to rally support for the types of initiatives, the taxes, the carbon pricing that is required to address the larger challenges we face which includes the climate crisis.
“We are in an age of recurring pandemics. To prepare for them, we have to mainstream preparedness the way we are beginning to mainstream preparedness for climate change,” Mr Tharman said. “The world is still far from doing so,” he added.
These risks and sources of fragility together define a ‘perfect long storm’.