Features

State of independence

31 Mar 2009 by Sara Turner

Singapore’s skill at setting itself apart from its rivals means it will weather the global recession, says Kenny Coyle.

An old superstition says you can tell the future by reading tea leaves. In the case of Singapore, the island’s fate was certainly sealed by the world’s favourite brew.

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, when colonial India started producing its own high-quality tea a couple of decades later, Singapore’s trading lifeline, it seemed, had been cut. Yet within a few years its 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 British attempts 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 the city state deals with the effects of the economic downturn, along with the rest of the world, Singaporeans are already looking at the set of challenges recovery will bring. Phillip Overmyer, chief executive of the Singapore International Chamber of Commerce, believes the island’s traumatic birth as an independent state in 1965, when it found itself ousted from Malaysia, acted as a catalyst. “I think the split was a key event,” he says. “It happened at the beginning of the Vietnam war, against a rising tide of communism. There was high unemployment and widespread poverty.”

Overmyer says the state’s corporate structure, which allows 100 per cent foreign ownership, and its excellent infrastructure have been key advantages in a region where these were the exception to the rule for decades. “The government identified key industries and recruited companies to establish their operations here,” he explains. “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, and the fact that Singapore works hard to keep its currency at reasonable levels and to keep tax and labour costs competitive.”

The “lion city” has a fearsome reputation for dealing with law-breakers. In a region where political instability and governmental corruption have been rife, it has established a reputation as a reliable and honest destination, where government support and funding is not dependent on bribery or under-the-table favours.

The Singapore Economic Development Board is the agency responsible for encouraging inward investment, with 19 offices in key business centres worldwide. It offers advice and contacts for companies looking to set up operations here or to expand their existing presence. Tan Choon Shian, the agency’s assistant managing director, argues that Singapore’s competitive advantage in the region will continue to be based on a quartet of factors. “We think Singapore has four elements that account for its strength as a business destination – trust, knowledge, connectivity and life,” he says. “Some other countries have one or some of these elements, but not many 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. Next, we are connected. Our location and facilities mean it’s easy to move in and out of Singapore, so we help business to flow across the region. Lastly, we have a way of life that is comfortable and sustainable. It’s a great place for families to work and play. It’s a safe city with good schools.”

Singapore’s continuing ability to attract highly skilled individuals from overseas will also be crucial, Tan believes. “When we talk to investors, the single most important element is always the availability of talent,” he says. “No city can offer all the talent that is needed in a modern economy, so there needs to be a combination of local and international skills. We make Singapore an attractive and cosmopolitan place to live.”

Certainly, Singapore has worked hard to shake off its old image. For years it was seen as something of a cultural backwater with a political culture that seemed to smother free expression and creativity. A relatively recent addition to its selling points is the heavy investment in arts and entertainment. The centrepiece of this is Esplanade – Theatres on the Bay, a waterfront complex comprising a concert hall, theatre and outdoor performing spaces. Meanwhile, shopping boulevard Orchard Road has just completed an £18 million renovation programme complete with urban furniture and outdoor “green rooms”.

Now, with the arrival of two Integrated Resorts (casino-based developments) at Marina Bay Sands and Resorts World at Sentosa, Singapore is positioning itself as the entertainment centre of South East Asia.The decision to legalise casinos at the resorts was a controversial one, but both resorts will bring attractions beyond the roulette wheel. Major convention and exhibition facilities will add to the existing purpose-built venues at Suntec and Singapore Expo, but the IRs will also provide leisure offerings, such as a Universal Studios theme park on Sentosa and the Marina Bay Sands’ two theatres, for everything “from Broadway to Bollywood”.

Singapore has also seen the growth of a creative knowledge economy. Whereas 30 years ago the island was assembling early computers and a decade and a half ago it had shifted to precision circuit-boards and hard drives, today its computer industry has largely shifted from hardware manufacturing to software development. Overmyer says Star Wars creator George Lucas has set up a creative animation unit here, 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 recession? Tan argues that it is a case of “first in, first out”.

“Because of our links with all parts of the world, when there is a global problem Singapore is hit hard and fast. But we think that as in previous economic crises, such as in 1997, 2001 and 2003, we are not only fastest out of the downturn but are able to take up a higher position than before.” The government has already unveiled a S$20.5 billion (£9.5 billion) resilience package to support salaries and offer tax relief to businesses and individuals.

Tan says a lot of research is being done to chart Asia’s “mega-trends”, of which he identifies three – urbanisation, ageing 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,” he says. “These places face difficult issues such as transportation and environmental sustainability, which we have a vast amount of experience in handling. This translates into huge business opportunities for us. We seek out suitable partners and help to fund bids for projects.”

The ageing population is also a big issue, with demographic revolutions happening across the continent. Life expectancy is increasing and birth rates are falling. “This puts a great strain on healthcare,” Tan says. “It 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, affluence, is seen in rising living standards and the creation of a vast market of middle-income consumers. “This enables us 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 £290,000 in merchandise; by 2007, the city had an estimated GDP of £115 billion. The current crisis will no doubt dent the island’s economy, but past experience suggests it will be only a matter of time before it bounces back.

British business in the Lion City

Singapore has been prioritised by UK Trade and Investment in its strategy, Prosperity in a Changing World. The five-year strategy for the government department came into effect in 2007 and is designed to encourage UK companies to develop their businesses in a handful of international markets seen as having strategic importance in the future. Singapore is one of these, along with Brazil, China, India, Mexico and a selection of other Asian and Gulf states.

Sebastien Barnard, marketing and communications manager at the British Chamber of Commerce in Singapore, says: “The UK is the biggest foreign investor in Singapore – it has more than 700 companies established here. It is the recipient of more Singaporean investment than anywhere else in Europe.

“In many ways, both countries are natural partners, with a common business language, diverse and multicultural societies, and an open free-trade ethos. Singapore’s excellent international transport links, high-quality health and education systems and efficient technology mean it’s an attractive place for British expatriates to live. And the fact that so many familiar brands and retail names can be found in the shopping centres is a big comfort.”

Major UK investors in Singapore include Barclays, BP, Diageo, GlaxoSmithKline, HSBC, Royal Bank of Scotland, Rolls-Royce, Shell, Standard Chartered and Unilever.

What to see

Battle Box

Deep within the hillside at Fort Canning is the Battle Box, used as an underground command centre by the British Malaya Command Headquarters during the Second World War. The Battle Box has been extensively restored and special audio-visual effects and high-quality animatronics allow visitors to relive one of the most dramatic days in Singapore’s history, February 15, 1942, when it fell to the Japanese. It’s open every day from 10am-6pm.

51 Canning Rise; tel +65 6333 0510; legendsfortcanning.com

Mustafa Centre

This Singaporean institution is a 24-hour, six-storey shopping centre stocking everything from Indian chutney and diamonds to plasma TVs and cars. The mall likes to claim that it is the natural spot for insomniacs, shopaholics and jet-lagged tourists looking for a late-night or early-morning bargain.

145 Syed Alwi Road; tel +65 6295 5855; mustafa.com.sg

Asian Civilisations Museum

A visit to this museum will introduce you to the heritage of key Asian cultures, many of which ended up in the melting pot that is modern Singapore. It showcases the rich material heritage of the Peranakans from the Straits Settlements and the Indonesian Archipelago, as well as housing a series of galleries offering insights into the cultural heritage of India, China, South East Asia and the Islamic world. State-of-the-art interactive technologies with educational elements are carefully integrated into the galleries. Open Mon 1pm-7pm, Tue 9am-9pm, Wed-Sun 9am-7pm.

1 Empress Place; tel +65 6332 2982; acm.org.sg

Makansutra Food Safari

The safari takes participants on a whirlwind tour of three or four eateries to sample some of the best dishes around. Besides the popular local hawker fare, such as Hainanese chicken rice, laksa or rojak, you can try out award-winning restaurants serving Asian and international cuisine. A host will explain the origins, recipes and cooking methods used.

Tel +65 6438 4038; makansutra.com

Where to stay

Capella

Billing itself as Singapore’s newest “ultra-luxury hotel”, the Capella on Sentosa Island offers an offshore alternative to the city properties, while being only a few minutes from the urban hustle and bustle. The Capella’s portfolio of rooms, suites and villas include the three-bedroom, 436 sqm Capella Manors, which have private pools. Free wifi is available.

1 The Knolls, Sentosa Island; tel +65 6377 8888; capellasingapore.com

M Hotel

Minimalist and functional, the 413-room M Hotel offers the business traveller a neat property that delivers solid, reliable service. Standard rooms come with flatscreen TVs and a daily newspaper, while Club rooms also come with iPod docking stations and free broadband access. For nightlife, try the J Bar on the hotel’s ninth level and enjoy the generous happy hours (3pm-8.30pm Monday to Friday, 5pm-8.30pm Saturday).

81 Anson Road; tel +65 6224 1133; millenniumhotels.com.sg

Royal Plaza on Scotts

Proudly claiming to be the first smoke-free hotel in Singapore, the Royal Plaza on Scotts can’t be faulted for its location in the heart of Singapore’s retail, dining and nightlife district. Free broadband and minibars are nice added touches.

25 Scotts Road; tel +65 6737 7966; royalplaza.com.sg

Conrad Centennial Singapore

Set in the Marina Bay complex of hotels, restaurants, office blocks and exhibition space, the 507-room Conrad provides easy access to the city’s business heart. Out-of-office time can be spent easily in the estimated 1,000 shops and 300 restaurants within a few minutes’ walk. Broadband is available at S$30 (£14) per day.

2 Temasek Boulevard; tel +65 6334 8888; conradhotels1.hilton.com

Goodwood Park Hotel

The Raffles Hotel isn’t the only Singaporean address with history. The Goodwood Park Hotel was originally built in 1900 as a club for the German expatriate community. Today its colonial-era structure houses 223 rooms and suites, featuring such amenities as a minibar and tea and coffee-making facilities. Wifi costs S$32 (£15) per day. Carnivores will adore the meat-trolley service at Gordon Grill.

22 Scotts Road; tel +65 6737 7411; goodwoodparkhotel.com

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