Singapore's two proposed casino resorts could boost the city-state's economic growth by nearly two percentage points and indirectly create about 20,000 jobs, an economic study predicted.
Tilak Abeysinghe and Choy Keen Meng of the National University of Singapore said their findings, based on a macroeconomic simulation, provide a partial analysis of the casinos' impact.
Bidders for the casino project are to submit their proposals by March next year for an opening in 2009.
"The model simulation results indicate that Singapore's economy will be lifted for about five years," the study said.
After one year, GDP, the total of all goods and services produced in the country, would get a boost of 0.75 percentage points, it said. There would then be further annual increases in GDP peaking with a 1.8 percentage points gain in year five.
The economy will be primarily boosted by higher production of services led by increased tourist arrivals, Choy said. The study showed service sector output would gradually rise, peaking with a 2.2 percent increase in year five.
"Employment will expand correspondingly by 0.9 percent, translating into roughly 20,000 new jobs," the economists said.
They noted that they did not include the direct employment creation estimated to be more than 10,000.
Singapore, Southeast Asia's wealthiest economy, had a GDP last year of S$181 billion (US$108 billion).
Choy and Abeysinghe cautioned that their findings are not definitive.
"It's very much conditional on the assumptions that we made," Choy told reporters yesterday.
The simulation's findings are based on an assumed 10 percent rise in business and leisure travelers, a 20 percent increase in private construction contracts, a 10 percent gain in share prices and a one percent increase in government consumption spending to bolster law enforcement, social services and other measures.
Choy said the study was unable to account for the economic costs of law enforcement and the wider social costs of gambling.
"We are not able to quantify these effects but neither do we dismiss them as trivial," the study said.
Singapore in April lifted a four-decade ban on casinos despite strong domestic opposition and said two gaming resorts, with a combined cost of S$5 billion, would boost the tourism sector and draw more visitors.
Tourism earnings totaled S$9.6 billion last year from 8.3 million visitors. Singapore wants to increase arrivals to 17 million with receipts of S$30 billion annually within a decade.
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