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Dr Michael D. Barr
Confidence building is the name of the game for Singapore Inc, and the main target is the international business community. This has moved to the top of the local eliteˇ¦s agenda and is the common theme among a wide range of government and government-related initiatives. Of course, building confidence is easier said than done in todayˇ¦s international and financial environment, and it does not help when very-near-neighbour Malaysia decides to stir the water by becoming provocative on several fronts all at once (including threatening Singaporeˇ¦s water supply and initiating a dispute over the sovereignty of a small island).
Far from reassuring the international community, even locals are nervous as routine diplomatic fencing takes a decidedly nasty turn. Diplomats have started speaking of 2002ˇV2003 as the worst period of SingaporeˇVMalaysia relations in twenty years. The youth wing of the ruling People's Action Party (PAP) has been forced to deny that it is fomenting talk of war and Dr Mahathir has found it necessary to explicitly rule out war. Dr Mahathir took particular offence at Singaporeˇ¦s decision to put official correspondence related to water negotiations on the web, likening it to your girlfriend circulating your love letters among her boyfriends.
Singapore has very limited control over Malaysiaˇ¦s initiatives, but even in domestic matters ˇV where the Singapore government's writ runs unchallenged ˇV confidence building is proving an uphill battle. In a country whose economic success was built substantially on imported expertise, the forced departure of a string of expatriate CEOs has raised the question of whether Temasek Holdings (the holding company for Singapore Inc) is forcing the pace in the localising of business leadership. Since the new head of Temasek Holdings is the wife of Deputy Prime Minister, Lee Hsien Loong, and daughter-in-law to national patriarch, Lee Kuan Yew, this in turn raises the question of whether there has been a change in government policy towards Singaporeˇ¦s imported business leadership. Thus, we witness the spectacle of Prime Minister Goh assuring the world that Singapore Inc is not deliberately pushing expatriate executives and technocrats out of local managerial and executive positions ˇV a proposition that would have been considered unimaginable a few years ago.
In the meantime, the government is plugging on promoting its positive agenda:
„X The Free Trade Agreement with the US is now settled. „X Negotiations with Thailand for closer economic ties are proceeding. „X Investments in high-margin service industries such as education and the setting up of corporate headquarters were up by 37 per cent in 2002, leading to the creation of nearly 3,000 jobs. „X The recession-driven downturn in cargo traffic through the Port of Singapore has been reversed ˇV at least for the moment. „X The Monetary Authority of Singapore is predicting a significant economic turnaround in the second half of this year, but the Economic Review Committee warns that ˇĄfull recoveryˇ¦ will have to wait until 2004. „X The Economic Development Board has announced that it is ready to start promoting the professional services industry in seven key areas: audit and accounting, management consulting, market research, advertising, public relations, human resource consulting and legal services.
These are modest displays of good news, perhaps, but not to be sneezed at in these difficult times.
WATCHPOINT: Is the Lee family not waiting for the accession of Lee Hsien Loong to the premiership to begin resuming its micromanagement of Singapore?
About our company:
AFG Venture Group is an Asia and Australia based corporate advisory and consulting firm with over 20 years experience in creating alliances, relationships and transactions in Australia, South East Asia and India; including a 15 year history of corporate and equities advisory in Australia, undertaking merger, acquisition, divestment, fund raising and consulting for private and public companies.
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