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Carl A Trocki
In early May, Singapore Prime Minister Goh Chok Tong paid a 5-day visit to the United States, meeting President George W. Bush in the midst of the American leader's attempts to put out fires erupting from the Iraqi prison torture scandals. Singapore is clearly concerned to shore up the US alliance. Continued weakness in the local economy and the prospect of rising threats of Islamic terrorism has reinforced Singapore's perennial fears for its own security. As the Iraqi situation unravelled and American doubts about the war grew, Goh's message was one that sought to encourage the US to win Muslim hearts and minds and to distinguish between militants and mainstream Muslims. He urged the US to reduce its pro-Israeli bias so as not to unite Muslims in a dislike of America.
At the same time, the Singapore government has fires of its own to put out with two major cave-ins at construction sites in Singapore. One involved the new rapid transit (MRT) tunnel beneath the Nicoll Highway and the other the collapse of scaffolding at another site. The accidents caused 6 deaths and over 20 injuries. There were charges that Singapore's tender system had forced contactors to cut corners in order to submit unrealistically low bids. Although the government denied that there were weaknesses in the tender system, the matter fuelled deeper concerns about worker health and safety issues in Singapore's construction industry, which is largely staffed by guest workers.
These collapses were followed by the collapse of a major Government Linked Company (GLC) in the construction industry. The suspension of business by the giant Synergy Construction leaving debts of $S40 million caught sub-contractors unawares. Many had thought, incorrectly, that because Synergy was a GLC, their bills would be covered by the government. Majority shareholders in Synergy are Jurong International, a subsidiary of JTC, Singapore's industrial landlord.
As the major port in Asia, threats from the sea cut at Singapore's heart. The rising incidence of piracy in the Straits of Melaka has led to fears of a terrorist attack from that quarter. The prospect of a hijacked oil tanker being used by pirate/terrorists as a floating bomb seems a real possibility. Pirates are well-armed, well-trained and have excellent intelligence. Singapore is concerned that its Muslim neighbours in Malaysia and Indonesia do not take the threat seriously enough. Concerns about local Islamic discontent sharpened after the massacre in late April of over 100 Muslim militants in Patani, Southern Thailand.
WATCHPOINT: With the impending retirement of PM Goh Chok Tong look for shake-ups and reshuffles in the top ranks of the Singapore bureaucracy and government corporations.
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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