Economic Cost of Haze Occurrence in June 2013

Mr R Dhinakaran asked the Prime Minister (a) whether the Government has calculated an estimated economic cost to Singapore and companies here due to the haze episode in June 2013; and (b) whether there was a loss of productivity due to employees being unable to perform their duties effectively.

Dr Ng Eng Hen (for the Prime Minister): As the haze affects all of Singapore, there will be an adverse economic impact. Studies have shown that the tourism sector, and other sectors which rely on outdoor activities, are the most affected by haze.

When the period of haze lasted as long as it did in 1997, the costs due to forgone revenue and loss of productivity were estimated at up to S$318.6 million 1 . In this recent episode, the actual number of days when the PSI level was unhealthy was limited as Singapore alerted the Indonesians to the problem as soon as we experienced hazy conditions. The actions of the Indonesians and favourable winds reduced the potential economic impact of the haze. As a result, absenteeism rates did not rise significantly during the week of the haze, and businesses did not experience a sharp drop in activity. However, our polyclinics did see an increase in visits for haze-related conditions 2 .

Note(s) to Question No(s) 47:

1 Two sets of estimates of the economic cost of the 1997 haze can be found in "Indonesia's Fires and Haze: The Cost of Catastrophe", by Priscilla M. L. Hon (1998) and in "The Economic and Social Cost of the 1997 Fires", by Euston Quah (1999). Of the two, Quah's estimates are more widely quoted. Quah cites S$318.6m as the upper bound estimate of the direct costs of the 1997 haze. The upper bound of the estimated total economic cost of the haze (direct and indirect) is cited by Quah as S$425m. More details about the two sets of estimates can be found in the Supp Info.

2 Asthma, Bronchitis, Emphysema, Upper Respiratory Tract Infections (URTI), Acute Conjunctivitis, Acute Myocardial Infarction and Ischaemic Heart Disease (AMI and IHD).