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Singapore’s Governance, Prosperity, and Future Challenges

July 24, 2018 • GLOBAL ECONOMY, SPECIAL FEATURES, Asia - Pacific, Governance & Regulation

By Ian Austin

The Singapore government post-GFC has moved to “anchor” in selected sectors and the peak MNEs within these designs for long-term national economic growth, and it showed how the national polity through the varying 2011 and 2015 election results has placed new demands upon governance within the island nation. 

 

Singapore’s success story of attracting skilled professionals and multinational enterprises (MNEs) has been examined extensively as the small island state has, through rapid economic development, risen since the 1960s to become a global city.1 Singapore’s success has highlighted the crucial importance of good public governance; one able to adapt to new circumstances over time. The People’s Action Party (PAP) leadership’s highly pragmatic leanings, an international reputation for prudent financial management and an effective anti-corruption stance, has meant that foreign political and enterprise leaders have found the Singapore government easy to engage with. Recent efforts throughout the late 1990s and first decades of the 2000s to attract MNEs at the forefront of innovation (biotechnology, medicine, advanced electronics) have been built upon a foundation of a 30-year record of attracting and developing partnerships with MNEs looking to utilise Singapore at lower-level technical skills capacities (broad consumer electronics, shipping maintenance and others).

Recent efforts throughout the late 1990s and first decades of the 2000s to attract MNEs at the forefront of innovation have been built upon a foundation of a 30-year record of attracting and developing partnerships with MNEs looking to utilise Singapore at lower-level technical skills capacities.

The Singapore government’s relationship with private enterprise is clear; it has been willing to participate in the national economy as either a dominant state-owned enterprise (SOE), and done so across many sectors. At the same time, it has not sought to protect domestic enterprises at the expense of foreign MNE interests investing into the national economy. State-owned enterprises, government-linked corporations (GLCs), and state-encouraged enterprises, founded and developed by the government, have both secured domestic economic advancement, enhanced international trade activity, and provided valued partners to MNEs operations in the island state. Singapore Airlines, Changi Airport, the Port Authority of Singapore (PSA) and the SGX (Singapore Stock Exchange), to name a few, are all products of this effective state activism, and are now internationally recognised for excellence in their respective sectors. As a city-state with a small market and a large strategically located port, the government and commercial elite (the two being interchangeable) has been a constant champion of global free trade. Today, Singapore remains active in both bilateral and multilateral trade processes. The Singapore government argues that even when multilateral processes such as the Doha round of free trade talks break down, Free Trade Agreements (FTAs) remain the pathway forward for the city-economy.2  Singapore’s political and macroeconomic environment, therefore, are all attuned to the needs and wants of MNEs seeking a risk-free environment from which to launch their products and services into greater Asia. Indeed, there is little risk in stating that Singapore is without peer in enacting policy prescriptions that are favourable to MNEs operations, and supporting these with an array of practical infrastructure, legal, human resource and social initiatives. For all of these collective economic achievements, or because of them, however, the very nature of Singapore’s continuing interaction with the international economy over the coming decades will be shaped by the very same central question now confronting developed and developing economies alike. That question being: With dramatic changes taking place in macro-environmental areas, such as technological advancements and national demographic profiles, how will polity concerns over material and social/environmental inequality be managed by the nation’s stewards?

 
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About the Author

Dr. Ian Austin is Senior Lecturer in International Business at Edith Cowan University. Most of his works examine Singapore as a wealth management centre and as a global city. He previously worked in Singapore for both private enterprises and the public sector.

References:

  1. 1. Low, L. 2010. Exploring New Engines for Growth. in Chong, T. ed. 2010. Management of Success Singapore Revisited. Singapore: Institute of Southeast Asian Studies.
  2. 2. Singapore FTA Network. http://www.fta.gov.sg/ accessed April 2, 2009.
  3. 3. Chong, T. 2009. Singapore in 2008: Negotiating Domestic Issues, Confrontations and Global Challenge.  pp. 289-304. Southeast Asian Affairs 2009. (Singapore: Institute of Southeast Asian Studies).
  4. 4. Singapore Department of Statistics https://www.singstat.gov.sg/ ; International Monetary Fund https://www.imf.org/~/media/Files/Publications/CR/2017/cr17240.ashx
  5. 5. GIC https://www.gic.com.sg/ ; Temasek https://www.temasek.com.sg/en/index.html
  6. 6. https://www.youtube.com/watch?v=sBPszhAIaQI Singapore “What’s Possible” campaign.
  7. 7. Robins, B. (March 10, 2014), Singapore turns its hand to wealth management The Sydney Morning Herald, www.smh.com.au/business
  8. 8. UBS Asset Management in Singapore https://www.ubs.com/sg/en/asset-management.html
  9. 9. Grant, J. (July 23, 2013), Singapore loosens Switzerland’s grip on wealth management, Financial Times, www.ft.com/cms/s/048c3630
  10. 10. Elections Department Singapore http://www.eld.gov.sg/
  11. 11. Yahya, F.B. ed. 2015. Inequality in Singapore, World Scientific Publishing: Singapore. 
  12. 12. The electorate of Malaysia on May 9th 2018 sent this very message in a most profound way toppling the long-term UMNO governing coalition in a largely unanticipated electoral route.

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