DESPITE THE RECENT market optimism, the global economy remains on edge. It is not that the risks in Europe, China and elsewhere have disappeared: Markets are rising on the hope that policymakers will miraculously resolve the formidable challenges. In this context, Singapore cannot remain complacent. As a small, highly open economy, its vulnerability places an inordinate burden on policy to be proactive. As we approach two key policy milestones — the budget at end-February and the monetary policy statement in April — it is worth thinking through how investors and businesses might be affected by policy changes in Singapore.

THE END OF one year is always a time of reflection and to think and plan for what lies ahead in the coming year. Unfortunately, forecasting the shape of the investment landscape next year is a particularly hazardous venture, given that today’s uncertainties are much greater than normal. But we need to at least clarify the issues, sketch out as best we can the main contours of this landscape and work out the implications for us in Southeast Asia.

FOR INVESTORS AND businesses in this part of the world, the critical question now is how resilient Asia will be in the face of the deepening eurozone financial crisis. Some observers, looking at recent data argue that the world economy outside Europe has been resilient and take solace from this. A deeper look at the data and the processes driving Asian economies suggest that such a view could be overly benign.