Many people talk about economic miracles. But Singapore really is. How can a city-state of over 5.5 million people, just a little red dot on a map, generate a GDP of almost $350 billion GDP? And therefore, be in the 40th largest economies in the world in terms of GDP and Number 7 in terms of GDP per capita? Not to mention the most innovative country in Asia and 3rd in the world (according to INSEAD).
Well Singapore has done all this. The Founder of Singapore, Lee Kuan Yew took a little remote fishing village later British colony, that had been flattened by Japanese attack in World War Two and made it into one of Asia’s and the world’s greatest economic success stories. Singapore is a tech giant, a trading entrepot with the world’s busiest airport and ports logistics and is the gateway to South East Asia and a global business destination in its own right.
And in fact, the airport economist is a great beneficiary of the Singapore miracle. In the 1980s, at the University of Adelaide, as I was of only a few Australians studying Econometrics and Mathematical Economics with a golden generation of Singaporean students at Adelaide in the 1980s who later went on to achieve great things in Singaporean public life. Most of this cohort was meant to go to Oxford to study nuclear physics to become rock scientists but somehow ended up in Adelaide to study economics on Colombo plan scholarships (Australian Government scholarships to attract South East Asian students to Australia). And I must say I was a great beneficiary of this move as the ‘spillover’ benefits of having very bright Singaporean students as classmates improved my results in Mathematical Economics and Econometrics and enabled me to become a chief economist and academic myself. It also improved the standard of Asian food in Adelaide (which is now world class thanks to Master chef TV personality Poh Ling Yiew, herself, an Adelaide girl of Malaysian Chinese descent) and my appreciation of the delightful cuisine of South East Asia. In fact, in my university holidays at Adelaide, I travelled to Singapore, Malaysia and Thailand to visit my university friends in and every night was a trip to the famous ‘hawker centres’ and other delightful places of unique spices and flavours. In some way, my life as an airport economist and my interest in the nations of Asia all stemmed from my Singaporean and Malaysians classmates at Adelaide when (to quote Redgum) I was only 19!
And my Adelaide classmates did pretty well back in Singapore. For example, Raymond Lim (see ‘Everybody loves Raymond’ in my first book The Airport Economist) became a cabinet minster – for both Transport and later Industry. My first year tutor Professor Kim Song Tan is a leading academic at Singapore Management University (SMU) after a distinguished career at the Straits Times and in financial markets, my second year tutor, Peter Ong is head of the civil service, brilliant scholar Chia Tai Tee is head of risk at the Singapore’s sovereign wealth fund, GIC, and Phua Kok Kim has been a high flyer at Maple Tree Investments.
In fact, the ‘Adelaide mafia’ as they are known in Singapore were very helpful when I was working as Adviser – International Engagement to the then Premier of South Australia, Jay Weatherill. Not only were the likes of Peter Ong very helpful in opening doors for South Australians in Singapore but even the President, Tony Tan Leng Yam, himself is a one of the University of Adelaide’s most distinguished alumni. The Premier met with President Tan on his first official visit as Premier to Singapore this week and the University of Adelaide awarded him one of their highest honours to mark their 140th anniversary.
The Adelaide mafia were instrumental in advising South Australia on how to engage with Singapore and the rest of ASEAN as part of South Australia’s South East Asia strategy. ASEAN is seen as the third engine of growth for the state in terms of exports and investment along China and India. The use of Adelaide alumni as well as “Generation Expat” – that is South Australians living and working in Singapore, Shanghai, San Francisco and Santiago and the rest – is an important part of South Australia’s international engagement strategy that leverages human and social capital as well as finance.
In fact, Singapore is proving to be an important model for South Australia. The well-respected Singapore Economic Development Board (EDB) meets regularly with the South Australian Economic Development Board develop some joint strategies and exchange intelligence and strategic information. There are also ties between Singaporean and South Australian defence, energy, technology and agribusiness companies, GIC and Singapore Airlines (which is a strong supporter of Adelaide Airport).
Of course, on the back of all this success, Singapore has successfully set itself up as the Gateway to South East Asia, for foreign businesses large and small. Jaime Camidge, head of Telstra’s start up project Muru D, is impressed with Singapore’s “eco system that links entrepreneurs and start-ups to potential investors.” According to Camidge:
“Singapore has a healthy Venture Capital scene, and is the centre of gravity for South East Asia, where nearly 600 million people are entering the middle class all becoming engaged by social media and technically savvy. Business to Consumer, or B to C, is the next big play”
Camidge believes that for foreign companies “90 per cent of it is just being here” in terms of forming partnerships in the Singapore eco system. “The power of proximity leads to the opportunity for partnerships, but that can’t be done remotely,” he explains.
But Singapore is not just a good place for start-ups looking for seed money from Venture capitalists. Singapore is also a great place for SMEs to have their Asian headquarters like Adelaide coffee cleaning appliance maker, Cafetto. CEO Chris Short says he chose Singapore to base their operations, because
“The Legal structure is straightforward, it’s a truly open economy, and any initial expense in set up costs is negated by ease and low cost of business once you are in Singapore.”
Australian natural health company Blackmores, also chose Singapore, as it’s Asian headquarters because as their Finance Director Evelyn Seah explained: “Singapore is the mid-point for our operations as it gives us access to Multilingual multi skilled multi-disciplinary professionals, not to mention it’s convenient location in the heart of South East Asia. It’s a pro-business environment”
But sometimes it essentially comes down to cost as Peter Allen of Grant Thornton Singapore, explains in his self-declared ‘G and T’ test:
“Some things are very cheap think Taxis. Some things are very expensive think Gin. Hence, G and T. But taxes are low with income tax, between 0 and 20 per cent, GST is only 7 per cent and the corporate tax rate is just 17 per cent.”
But after all this success, has Singapore an Achilles heel? In some ways, it’s been a lack of creativity? Whilst Singapore was producing lots of engineers, IT and Finance specialists it was short on producing ballet dancers and poets. This troubled Raymond Lim in his time in office, and some of his civil servants proposed compulsory “creativity sessions” (really, like on Saturdays only between 10 and 12noon sharp?) and they even came up with a proposed slogan, “In Singapore… We take fun seriously!”. How ironic that when Australia frets it doesn’t have enough students in the STEM subjects (Science Technology Engineering and Maths) countries like Singapore, South Korea and China are trying to move away from STEMs with a whole new “Be creative” drive. Maybe both should learn the economic principle of comparative advantage and not try and be good at everything? In any case, just as Jay Weatherill was tireless in developing Adelaide as a ‘creative capital’ following former Premier Don Dunstan’s vision in the 1970s, Singapore has been doing similar things with a new emphasis on creativity and creative industries. So, attracting National Geographic to set up along with new Arts Centres and concert halls is all part of Singapore’s new focus to see innovation in the arts and creativity to be just as important as entrepreneurship and a thriving start up scene. Because Singapore has learnt that finding great artists is like finding great entrepreneurs, you can’t ‘plan’ them with seminars and silly slogans on government buildings, but you can create the right environment in which they can thrive. Even when you are just a small red dot on a map!
“Singapore is the place everyone feels at home. It’s often the first place an Australian travel to in South East Asia for business (Bali for pleasure, depending on how you define it), and many Australian companies have their regional base there. It’s clean, it’s efficient, it’s air conditioned, it works and now that’s they’ve had so much success, they are learning how to have fun! And the food is great as it always has been on both and international and regional scale.”
Just a few simple tips:
- Like the airport economist with his Singaporean ‘Adelaide mafia’ mates work those University Alumni networks. All the major Australian universities have a strong alumni presence in Singapore.
- Government badge not only matters in Singapore it is an advantage. Singapore values its politicians and civil servants and pays them well.
- Look out for professional bodies from Australia that are based in Singapore. For example, CPA Australia has a chapter in Singapore and indeed across ASEAN – http://www.cpaaustralia.com.au/member-services/fees/singapore
- Have a good time – despite the Government slogan “In Singapore, we take fun seriously.”
*Tim Harcourt is the J.W.Nevile Fellow in Economics at UNSW Sydney and host of The Airport Economist TV show www.theairporteconomist.com and The Airport Economist Podcast: https://www.podcastoneaustralia.com.au/podcasts/the-airport-economist