Singapore Counts on F-1 Night Race to Brighten Economic Gloom
McLaren driver Lewis Hamilton will lead the charge around Marina Bay business district at speeds as high as 185 miles per hour (300 kph) — six times the limit for streets normally filled with taxis and trishaws ferrying workers and tourists.
Singapore, girding for a possible recession, is paying about $200 million over five years for the rights to host the event, tapping the glitz of the world's most-watched motor races to promote itself as something more than a financial hub.
“Singapore has always been known as a good international business center,'' S. Iswaran, senior minister of state for trade and industry, said in an interview. “What we want to do is also raise Singapore's profile as a global city with great lifestyle, buzz, vibrancy.''
The race is the latest attraction for the Southeast Asian city, including two casino resorts, an $850 million sports center, and the first Youth Olympic Games in the next three years. The world's biggest Ferris Wheel — the Singapore Flyer – – opened this year, towering over the pit lanes that will teem with the mechanics and drivers of Ferrari, McLaren and BMW.
Hosting major sports events is part of Singapore's strategy to diversify the economy from its traditional manufacturing base and to attract tourists, economists say. The F-1 effect will be felt over years and won't be measured by the experience of this weekend's race alone.
Global City
“Singapore wants to become a global city and events like these are needed to make it one,'' said Song Seng-Wun, an economist at CIMB-GK Securities Pte in Singapore. “The F-1 race is just another piece in a big jigsaw puzzle.''
The arrival of F-1 pacesetter Hamilton and world champion Kimi Raikkonen coincides with one of the closest championships – – and a financial slowdown that's pushed Singapore to cut its growth forecast to between 4 percent and 5 percent this year from the 7.7 percent pace in 2007.
“The financial turmoil throws up quite a lot of uncertainty, but tickets have sold out,'' said Vishnu Varathan, a regional economist at Forecast Singapore Pte. “Retailers will probably see more restrained spending.''
Iswaran expects Formula One to deliver S$100 million ($71 million) of extra tourism revenue, with about half the 100,000 people involved in the Grand Prix flying in from overseas.
Hamilton Holding On
The closeness of the F-1 title race — Hamilton leads Ferrari's Felipe Massa by one point with five of 18 races to go — may intensify the spotlight on Singapore, whose skyscrapers and port provide the backdrop to the 3.15-mile (5.1-kilometer) street circuit.
“Just like the Beijing Olympics, all eyes will be on Singapore,'' said Michelle Denise Wan, a spokeswoman for the Ritz-Carlton hotel in the Marina Bay area, where rooms sold out by July even with a minimum four-night stay.
Not everyone is getting a slice of the windfall, including some retailers closest to the action. Road closures and entry restrictions to the race area has Melvin Yap considering shutting his watch store in Millenia Walk.
“Things are going to be really bad,'' said Yap, sales director at Precious Time Pte. “Our regular shoppers won't be coming here.''
“We'll have to rely on tourists,'' added Gary Liew, of Oriental Handicraft Pte, which sells home furnishings in the Marina Square shopping mall. “I don't really think a millionaire would want to shop in an ordinary mall like this.''
Sport of Choice
Formula One, with about 150 million viewers per race, is becoming the sport of choice for cash-rich nations. Bahrain added a Grand Prix in 2004, while Abu Dhabi is paying a record $45 million for rights to host its first race next year, according to Formula Money, which tracks the sport's finances.
Like Singapore, the Arab states are seeking to enhance their image and bring other streams of revenue to their economies. South Korea and India will add F-1 races in 2010.
Sports, art and culture “create an engine with multiple cylinders,'' said Vivian Balakrishnan, Singapore's minister for community development, youth and sports, in an interview. “We hope we can get this engine firing on all cylinders and pretty fast regardless of economic cycles.''
The influx of wealthy fans to Singapore — located 85 miles (137 kilometers) north of the equator — comes as tourism slows amid creeping inflation, a stronger currency and weaker global economic growth.
`Not Immune'
Visitor numbers dropped 3.8 percent in July and 7.7 percent in August, putting in jeopardy Singapore's target of a 5 percent rise this year to 10.8 million. Tourism accounts for about 6 percent of the economy and the city is aiming to double revenue to S$30 billion by 2015.
“We're not immune to the effects of the global slowdown,'' Iswaran said. “Our attractions, whether it is Formula One or the integrated resorts, will all have to brace themselves for a more challenging environment.'' Bloomberg