Asian govt offer relief to SARS-hit businesses<\/p>\n
David Brooks, Agence France-Presse, Hong Kong<\/p>\n
Asian governments are starting to respond to the cries of anguish
\nfrom businesses decimated by the deadly SARS outbreak with
\nemergency packages to help the worst affected sectors.<\/p>\n
Singapore announced relief measures worth $S230 million
\n(US$130 million) on Thursday. The other most badly affected
\neconomy in the region, Hong Kong, is expected to follow suit as
\nsoon as this coming week and Taiwan has stepped in to offer
\nsupport to local airlines and tourism firms.<\/p>\n
The travel and tourism industries have borne the brunt of the
\nSevere Acute Respiratory Syndrome (SARS) outbreak since it
\nstarted in southern China's Guangdong province late last year and
\nspread to Hong Kong in February before being carried around the
\nglobe by air travelers.<\/p>\n
Governments, already under severe budget pressure after
\nregional economies were hammered by the regional financial crisis
\nfive years ago and 2001's global slowdown, are finding themselves
\nagain searching for band-aids for their bleeding economies.<\/p>\n
Regional airlines, still recovering from the 2001 slump, have
\nbeen among the first to send out an SOS, saying up to 50 percent
\nof their flights have been suspended.<\/p>\n
\"Airports and air traffic management services can and must
\nreduce their charges, rents and other burdens which they impose
\non the airlines regardless of the fluctuations of the markets,\"
\nsaid Richard Stirland, director-general of the Association of
\nAsia-Pacific Airlines (AAPA).<\/p>\n
Such steps were vital to the survival of regional airlines, he
\nadded.<\/p>\n
Singapore, which like Hong Kong relies heavily on tourism and
\nits role as a regional transport hub, has cut its economic growth
\ntarget to 0.5-2.5 percent this year from 2.0-5.0 percent due to
\nthe impact of SARS.<\/p>\n
Its assistance measures focus on the devastated tourism
\nindustry, which suffered a 61 percent plunge in visitor arrivals
\nin the first 13 days of April from a year earlier. Hotel
\noccupancy rates fell to 20-30 percent from normal levels of at
\nleast 70 percent.<\/p>\n
The package includes rebates for airport landing fees, a
\nreduction of the levy paid by employers for their foreign workers
\nand property tax relief for shops, hotels and restaurants. It
\nwill take effect in May and last until the end of the year.<\/p>\n
\"This is an immediate response and now we will have to watch
\nvery carefully how the situation develops and if there is a need
\nto do more later and there is justification to do more later, we
\nare able to do so,\" Deputy Prime Minister and Minister of Finance
\nLee Hsien Loong said.<\/p>\n
In Hong Kong, the two local airlines Cathay Pacific and
\nDragonair have cut flights by more than 40 percent, hotels,
\nrestaurants and bars have emptied and retailers claim sales have
\nbeen cut in half since the last half of March.<\/p>\n
Analysts have cut their economic growth forecasts for Hong
\nKong by around one percentage point because of the SARS.<\/p>\n
Hong Kong Chief Executive Tung Chee-hwa said this week the
\ngovernment will announce relief measures \"very soon\" and there is
\nspeculation they will be released during the coming week.<\/p>\n
Industry groups have proposed a raft of measures to the
\ngovernment, including the temporary lowering of pension fund
\ncontributions and a delay to previously announced rises in
\ncorporate and personal tax rates.<\/p>\n
Attempts by the government in last month's budget to rein in
\nthe spiraling budget deficit are being frustrated by SARS.<\/p>\n
The Hong Kong government has forecast a HK$68 billion dollar
\n($8.7 billion) budget deficit for the current year to March but
\nDaniel Chan, senior economist at DBS Bank, said the virus
\noutbreak is likely to swell the deficit to between HK$80 billion
\nand HK$90 billion.<\/p>\n
The Taiwanese government announced last week it will cut
\ncharges for the aviation and travel industries to help them
\nweather what they describe as their worst ever crisis.<\/p>\n
Some airport fees will be halved while the payment of others
\ncan be delayed and travel firms' training costs will be
\nsubsidized.<\/p>\n
The measures offered by governments so far will help provided
\nthe outbreak is quickly contained. However, as Singapore's Lee
\nsaid, the continued spread of the disease means \"all bets are
\noff\".<\/p>",
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