An old superstition says that you can tell the future
by reading tea leaves. However, unlikely that belief might be, in the case of
Singapore, the island’s fate was indeed destined by the fortunes of that everyday kitchen commodity.

When Singapore was
established as an East India Company trading outpost in 1819 by Sir Stamford
Raffles, its role was to handle the British Empire’s growing maritime trade in
tea from China; clippers filled the island’s harbours with tea-chests from the
Orient on their way to Britain. However, in a couple of decades, colonial India
started producing its own high-quality tea, which soon became the dominant brew
on British breakfast tables.

Singapore’s trading
lifeline, it seemed, had been cut, leaving the island apparently redundant.
Yet, within a few years, Singapore’s merchants and traders had established new
trade routes and commodities, such as Malayan tin and rubber, and doggedly
defended the island’s free-port status against the attempt by British
authorities to introduce taxes and tariffs.

It is this ability to
remake itself, to keep one step ahead of its regional rivals and to turn its
weaknesses into strengths that has allowed Singapore not only to survive
against the odds but to thrive.

As Singapore enters a
period of economic uncertainty along with the rest of the world, Singaporeans
are already looking at the next set of challenges that recovery will bring,
while other nations are still reeling from the banking body-blows. While there
may be few soothsayers able to predict the next period with any credible
accuracy, Singapore’s almost Darwinian instinct for survival and adaptation
remains as strong as ever.

Phillip Overmyer, chief
executive of the Singapore International Chamber of Commerce (SICC), believes
that Singapore’s traumatic birth as an independent state in 1965, when it found
itself ousted from Malaysia, served to act as a catalyst for the island. “I
think the split with Malaysia was a key event.

It happened at the
beginning of the Vietnam War, with a rising tide of communism. There was high
unemployment and widespread poverty in Singapore.”

He says the country’s
corporate structure, which allows 100 percent foreign ownership, and the excellent infrastructure have been key advantages in a region where this
was an exception to the rule for decades.

“Singapore’s government
identified key industries and actively recruited companies to come and
establish their operations here. That meant local people were employed and
trained at the high end of the scale. Added to this are the outstanding air and
sea ports.

“Singapore works hard to
keep its currency at reasonable levels and to keep tax and labour costs at
competitive rates.”

The Lion City has a
fearsome reputation for dealing with law-breakers. Yet in a region where political
instability and governmental corruption have been rife, Singapore established a
reputation as a reliable and honest destination, a place where government
support and funding was not dependent on bribery or under-the-table favours.

The Singapore Economic
Development Board (EDB) is the agency responsible for encouraging inward
investment into the city-state, with 19 offices in key business centres
worldwide. The EDB offers advice and contacts for companies looking to set up
operations in Singapore or to expand their existing presence.

Tan Choon Shian is the
EDB’s assistant managing director. He argues that Singapore’s competitive
advantage in the region will continue to be based on a quartet
of factors.

“We think that Singapore
has four elements that account for its strength as a business destination:
trust, knowledge, connectivity and life. Some other countries have one or some
of these elements but none have all of them.

“By trust, I mean that
we offer a credible, stable environment based on a strong legal system. We are
moving from a capital-intensive economy to a knowledge-based one and we provide
a knowledge of operating in key markets.

“Thirdly, Singapore is
connected. Our location and our facilities mean that it’s easy to move in and
out of Singapore, so we help business flow across the region. Finally, we have
a way of life that is comfortable and sustainable. Singapore is a great place
for families to work and play. It’s a safe city with good schools.”

One of the country’s key
concerns is to constantly improve the quality of its own workforce.

Overmyer says: “Some
challenges are continuous. There is always a need for retraining as some skill
levels need to be increased and others become obsolete. This has been a very
quick social transformation, covering just one or two generations.”

Singapore’s government
is keen to stress its business-friendly credentials, a place where deals can be
done easily and with confidence.

Overmyer’s chamber is
the oldest of its kind in Asia and was founded in 1837, during the tea crisis,
as two dozen or so companies banded together to lobby the British colonial
authorities to lift trade tariffs and to return Singapore to being a free port.
The chamber won.

Today, the chamber’s
membership is drawn from the large multinational companies based in the city.
However, unlike its early years, when membership was concentrated in British
and European hands, today 40 percent of the SICC’s corporate members are Singaporean. Names such as Temasek and Singtel are no longer those of purely local firms but have a
regional and global recognition. The remaining 60 percent of SICC members come
from 40 different countries with the US, Germany and the UK making up the
largest blocks.

The SICC also works
actively with various national chambers such as the AmCham and BritCham, and
with Singapore’s ethnically based chambers, the Singapore Chinese Chamber being
by far the largest.

While the SICC’s lobbying days are not
over, the chamber has become a key partner with the Singapore government, says
Overmyer.

“The government seeks
ideas and opinions from our members about what should be done in particular
sectors and works with our members and our specialist industry groups to
capture this information.”

Overmyer has also seen a
shift in the diplomatic circuit: “Previously, some countries maintained small
embassies concentrating on political links, but now there is a shift to trade
officials.”

Singapore’s continuing
ability to attract highly skilled individuals from overseas, what it calls
“foreign talent”, will also be crucial, Tan believes.

“When we talk to
investors, the single most important element is always the availability of
talent. No city can offer all the talent that is needed in the modern economy,
so there needs to be a combination of local and international talent. We make
Singapore an attractive and cosmopolitan place to live.”

Certainly, Singapore has
worked hard to shake off its old image as a pleasant but rather dull and
unexciting city. A relatively recent addition to Singapore’s selling points is
the world of arts and entertainment. For years, Singapore was seen as something
of a cultural backwater with a political culture that seemed to smother free
expression and creativity.

Yet now, things have
turned full circle. The city invested heavily in the creative and performing
arts, with the centrepiece being the Esplanades at the Bay facility, and
Singapore’s calendar of music festivals and concerts attract thousands of
international visitors each year. However, with the arrival of the two
Integrated Resorts (IR) at Marina Bay Sands and Resorts World Sentosa,
Singapore is aggressively seeking to position itself as the entertainment
centre of Southeast Asia.

The decision to legalise
casinos at the IRs was a controversial one, but both resorts will bring
attractions far beyond the baccarat table or the roulette wheel. Major
convention and exhibition facilities will be added alongside the existing
purpose-built venues at Suntec and SingExpo, but the IRs will also provide new
leisure offerings, such as a Universal Studios theme park on Sentosa and the
Marina Bay Sands’ two theatres promise everything “from Broadway to Bollywood”.

Singapore has also seen
the growth of a creative knowledge economy. Whereas 30 years ago, Singapore was assembling early computers and a decade-and-a-half ago had shifted to precision circuit-boards and hard drives, today the island’s computer industry has largely shifted from
hardware manufacture to software development.

Overmyer mentions that
Star Wars creator George Lucas has set up a creative animation unit in
Singapore and he notes the rise of companies specialising in online gaming.

So Singapore has already
shifted into a new gear, hoping to catch a fresh wave of commercial
opportunities. But how will it survive the worst recession in the post-war world?

The EDB’s Tan argues
that as in previous crises, it is a case of “first in, first out”.

“Due to our links with
all parts of the world, when there is a global crisis Singapore is hit hard and
fast. But we think that as in previous economic crisis, such as 1997, 2001 and
2003, Singapore not only comes out of the downturn first but also fastest and
is even able to take up a higher position than before.”

Tan says that the
government’s Resilience Package (see box) is possible because the country has
strong reserves that can be dipped into, allowing the government to support
salaries and offer tax relief to businesses and individuals.

Most intriguingly, where
other cities and countries look barely a few years ahead, Singapore’s forward vision is measured in decades, trying to
spot opportunities and threats and laying the groundwork to prepare for them
long before they materialise.

Tan says a great deal of
research is going on in charting Asia’s “mega-trends”, of which he identifies
three: urbanisation, aging and
affluence. “Singapore was one of the first modern cities in Asia, but now
urbanisation is the trend across the continent, especially in China and India.
These cities face difficult issues such transportation and environmental
sustainability, which Singapore has already acquired a vast amount of
experience in handling. So this translates into huge business opportunities for
Singapore. We are working to ensure that Singapore is at the forefront of what we call ‘Urban Solutions’. We seek out suitable partners and help fund
bids for projects.”

The second trend is
aging, with demographic revolutions happening across the continent. Life
expectancy is increasing and birth rates are falling.

Tan says: “The aging of
populations is an especially fast trend in Asia and puts great strains on
healthcare. This means we need more hospitals and more innovative care. This is
an area where Singapore’s health providers can make a real impact.”

The third mega-trend is
affluence, the rising living standards and the creation of a vast market of
middle-income consumers.

“This shift provides an
opportunity for Singapore to market products and services to these newly
affluent populations whose lifestyles have been transformed,” says Tan.

Singapore has come a
long way and undergone countless transformations. In its first year of trading
in 1819, the port handled an estimated US$400,000 in merchandise; by 2007, the
city had an estimated GDP of US$161 billion. The current crisis will undoubtedly
dent the island’s economy, but past experience suggests that the bounce back is
only a matter of time.

For more information, visit
www.sicc.com.sg or www.sedb.com

DIGGING DEEP

The Singapore government has unveiled a S$20.5 billion (US$15 billion) Resilience Package to respond to the economic crisis.

To protect
domestic jobs, Singapore will:

• introduce a one-year Jobs Credit programme, offering
a 12 percent cash grant on the first S$2,500 (US$1,832) of the wages of each
employee on the CPF payroll.

• increase subsidies for The Skills Programme for Upgrading and
Resilience (SPUR) to help professionals,
managers, executives and technicians take up retraining courses.

• provide special payments to low-income workers.

• create 18,000 public-sector jobs over the next two years.

Stabilise
banking

Singapore will extend S$5.8
billion (US$4.25 billion) of government capital to stimulate bank lending.

Help for
businesses

• Property tax rebates

• Cut corporate income tax to 17 percent

• Cut road taxes for taxis, goods vehicles and buses by
30 percent for one year

Improve
infrastructure

Government-funded projects
will:

• bring forward a number of infrastructure projects to
2009

• fund sustainable development programmes over five
years

• develop road and rail networks, drainage and sewerage networks, and rejuvenate public housing??

• upgrade education and health infrastructure.

Source: www.singaporebudget.gov.sg

 

Giving travel a BOOST

The Singapore Tourism Board
(STB) is spearheading the Building on Opportunities to Strengthen Tourism
(BOOST) project to support the travel and hospitality sector during the tough
economic times, with additional funding of S$90 million (US$66 million).

The STB estimates that there will be between 9 and 9.5 million visitor
arrivals that will generate tourism receipts within the range of S$12 billion
to S$12.5 billion (US$8.8 billion to US$9.1 billion)

Online
initiatives

The STB has set up a “Fly on
US” promotion, which is hosted on both its website (www.visitsingapore.com) and Facebook. Online viewers
are encouraged to spread the word about Singapore by filling up seats in STB’s
virtual Uniquely Singapore aircraft with the names and email addresses of their
friends and family overseas. Every 2009th name submitted will win a
pair of free air tickets to Singapore and there is half a million dollars worth
of air tickets to be won in the next three months. The more names viewers
submit, the higher their chances of winning a S$10,000 (US$7,300) cash prize
available monthly till end-May 2009.

Business events

Companies bidding for
Singapore to host new events will now enjoy up to 70 percent funding to support
the tender, an increase from the previous 50 percent cap.

Business event organisers also stand to receive up to 50 percent more funding support on a comprehensive range of event costs, such as event hosting rights and VIP speakers’ fees.

Source:
STB

Tip off – Smart Travel Intelligence

Singapore may be a first-world city with first-world prices
but that doesn’t mean you can’t find ways to control your budget during your
business trip and you can do most of the hard work at a single spot, Changi
Airport.

Transfers

Taxi

In the past, most
business people would have moved from baggage reclaim to the taxi queue without
thinking. Average cab fare from Changi Airport to the Suntec complex can cost
over S$42 (US$27) during peak time (7am to 9.30am Monday to Friday and 5pm to 8pm
Monday to Saturday). But the exact same journey outside these times will cost a
little more than S$30 (US$19). Being flexible in your arrival times can be
worth it.

Train

An even cheaper
option, for those travelling without bulky baggage, is to use Changi Airport’s
MRT station (under Terminals 2 and 3). A 27-minute journey into City Hall
station costs just S$2.70 (US$1.78).

Shuttle bus

For S$9 (US$6), you
could choose the nine-seater Airport Shuttle service which picks up passengers
at all terminals and heads for city hotels. The downside is that you may end up
with a lengthier ride as the shuttle drops off your fellow passengers en route.

Currency

Changing money
overseas can be a time consuming and even risky venture. Changing money at
Changi Airport’s bureaux de change seems the best option. On January 21, we
found that changing HK$1,000 (US$129) would get you a little over S$190
(US$125) if you used either the UOB or Amex counter at arrivals, while some
in-town hotels were offering as little as S$164.50 (US$108) for the same
amount.

Mobile phone

While you are
changing money, you can buy a local SIM card, such as SingTel’s pre-paid Hi!
Card for S$28 (US$18), offering local calls at S$0.08 (US$0.05) per minute and
free incoming calls. A very competitive alternative to expensive roaming
charges or hotel phone rates.

Wi-fi

Should you need to
catch up on a few emails missed during your flight, you can use Changi’s free
Wi-Fi hotspots, rather than fork out as much as S$18 (US$11) an hour at some
five-star hotels in the city.