Wednesday, October 25, 2006

Economic :Singapore desperately needs the growth of regional ASEAN economies

Singapore for the last two decades had managed to serve as a hub for ASEAN. The region itself was roaring with high growth Tiger economies then and Singapore supported regional businesses and governments through its positioning of its services in finance, trading, services etc. Foreign investors too were rushing to the region then and were requiring these services which were not yet well established in the neighboring countries, hence naturally turned to Singapore for such services.

In current times both these two factors contributing to the demand for Singapore's services have waned. In regional countries like Indonesia, where growth is not as significant as in the past, there is a general observable decrease in demand for Singapore's services by Indonesian businesses and/or central/local governments. Foreign investments are also not rushing in into Indonesia as in the roaring 90s and hence foreign investors' demand for Singapore's services is also waning.

In regional countries like Malaysia and Thailand, there are many services such as port, airport etc which they have developed over time and today they decreasingly require such Singapore's services. In all the reliance of ASEAN economies on Singapore is no longer as significant as in the past.

Though Singapore initiated a few projects such as the Growth Triangle, it always maintained its direct role in the growth of regional economies to be a passive one. Part of this attitude is due to its sense of kiasuism and part of this attitude has been due to Singapore concentrating on itself only.

In recent years, investors are more keenly heading towards East Asia region. The reliance for services is shifting from Singapore to economies such as Hong Kong, Macau, Taiwan etc whose services are supporting the growth of economies such as China and Korea.

In light of this, there is an undeniable need for ASEAN growth to pick up and roar again for the regional demand of Singapore services to grow. It will be difficult to expect foreign investors to return to ASEAN with the same energy in any time soon. Hence the growth of ASEAN need to be inspired its local and regional businesses and governments. Singapore is kind of recognizing it and is making some efforts. However there needs to be a radical change in outlook towards Singapore's relations with ASEAN countries. Trust needs to be re-established.

Singapore also needs to aggressively enter the regional economies to development that can in turn promote economic growth. It needs to share its expertise in housing, health, education, transportation, energies and resources policies. It will be recommended to pursue an era of harmonization of living standards across ASEAN. This will require Singapore to be committed to ASEAN through direct investment, support for institutional infrastructure development and transfer of large amounts of knowledge and technology. Singapore will need to break free from its traditional sense of siege mentality that it is surrounded by Muslim neighbors, build better understanding and most importantly build up a strong sense of benevolence and discard its sense of kiasuism. This is the critical paradigm shift required and anything less than that will only yield cosmetic results.


Post a Comment

<< Home