Three global economic scenarios and their impact on Singapore

In these unpredictable times, it is always good to have options and be prepared for how global trends will take shape – all the more so for an open economy like Singapore.

Interestingly, the Ministry of Trade and Industry (MTI) actually has a team that tries to look beyond the horizon and map out the possible futures based on insights from different disciplines.

There’s actually a name for what such people do; it’s called the art of futures thinking. It involves mapping out scenarios that can have an impact on Singapore and what Singapore can do to thrive in such an environment.

Not surprisingly, with the US and China seemingly the only two super powers left and the two largest economies in the world, the MTI had come up with three possible scenarios for the global economy based on possible developments in these two countries and how such developments could affect Singapore.

I have quoted the three scenarios and their implications for Singapore directly from the MTI Futures Group’s paper, The Future of Global Trading Regimes: Three Scenarios, to retain their flavor and essence.

Whether such scenarios will come to pass is beyond anyone guess but they do provide plenty of food for thought and possibly sleepless nights for many people in Singapore.

Even if the trends presented below may seem unlikely to happen, it’s never too late to start thinking about them and preparing for the possibility of their coming.

Scenario 1: Chimerica reborn (both US and China succeed)

The US returns to strength after successfully emerging from recession. Heavy investments in its traditional strengths of entrepreneurship and innovation pay off, re-establishing the US as a high-quality manufacturing and export powerhouse in new growth areas such as green tech, digital media, advanced pharmaceuticals and energy products.

In exchange, China supplies a broad spectrum of consumer and capital goods. Chinese consumption of goods and services increases significantly, driven by a burgeoning urban middle class. Global imbalances gradually decline as world trade enters a long and stable boom.

Although the US no longer holds hegemony, the symbiotic relationship between the two giants dominates global affairs, displacing other international platforms in relevance; G2 replaces the G20 as the premier economic forum. The US and China compete intensely for the lion's share of the world's resources and talent, leaving the non-G2 world subject to price and supply volatility, tariffs and resource export bans.

In this bi-polar world, Singapore's friendship with the two giants requires a delicate balancing act. Resource grabs creates real threats of resource scarcity and periodic price shocks for Singapore. Squeezed out of the Chimerican dynamic at both ends of the value chain, Singapore finds renewed importance in the European Union and Japan as export destinations. Nevertheless, Singapore becomes a safe and neutral ground for the constant stream of new ideas from both Asia and the West to meet and meld.

Scenario 2: China’s World (US stumbles, China succeeds)

In this scenario, China is the centre of global demand in a uni-polar world, as US efforts to restart its export economy falter. The US economic recovery is hampered by stricter immigration laws, massive public debt and the inherent risk of new industries; the US consumer is forced to cut back on spending.

However, the Chinese leadership manages to enact reforms which stimulate China's domestic private consumption and unlock the country's large "savings surplus", further stimulating domestic demand to make up for the decline in US consumption. China's growing urban middle class drives demand for quality-of-life products such as urban planning expertise, clean technologies, wealth management and other premium goods and services.

As a result, China dominates global demand; trading partners re-orientate towards China in order to participate in this growth. China-centric trading and financial platforms emerge, in parallel to existing international frameworks which are now unable to accommodate China's growing demands. A China-Japan-Korea trade core forms, at the expense of Southeast Asia. Likewise, global talent and resources are sucked into China's relentless rise; it soon has the intellectual wherewithal to project thought leadership and determine global discourse.

In this uni-polar world where the centre of gravity has shifted north to East Asia, Singapore's geopolitical and economic space is greatly curtailed. Its value as a hub is likely to diminish; its success depends crucially on its ability to play by the new China-centric rules, and to continue to be attractive — counting on its urban planning, education and public governance expertise — to the Chinese elite and other affluent regional players.

Scenario 3: Bloc-ed World (both US and China stumble)

Bloc-ed World is a multi-polar scenario where both China and the US stumble.

In a prolonged global slowdown, China's domestic demand fails to step up as a viable alternative to lacklustre world markets; instead, China's property and equity asset bubble bursts, stalling the real economy. China enters a period of economic slowdown, leading to unemployment, social tension and political crisis.

With both China and the US in recession, there are no strong global leaders that can move on complex global issues; with no global watchdog, protectionism escalates and it becomes increasingly difficult to maintain a viable, open and consistent global trading system.

International organisations become diffused and ineffective and trade becomes politicised. The cost of trading escalates, causing trade to retreat behind regional blocs. Growth becomes sporadic and scattered, as economic activities restructure along geographical lines to reduce costs. The flow of resources and talent are restricted and often limited to regional blocs or a hub-and-spoke system of distribution. Ideas still travel; in a multi-polar, volatile scenario, a large variety of think-tanks and other sources of intellectual capital flourish in a diverse marketplace of ideas.

In this environment, Singapore finds shelter in ASEAN, producing higher-end goods and services for regional elites. Repatriated income and profits from investments abroad overtake trade as a critical income source for Singapore. By attracting its share of talent and thought leadership, Singapore could become a "horizon scanning base", sniffing out emerging pockets of growth opportunities dispersed around the world.

The full text of this paper is available here.

As the Last Train Pulls Away . . .

Come 1 July, the time would be upon us to say our last goodbyes to an icon that holds fond memories for many of us.

Train services from the Tanjong Pagar Railway Station (TPRS) will have ceased on that day as the Keretapi Tanah Melayu Berhad (KTMB) operations are relocated to the Woodlands Train Checkpoint (WTCP).

And along with it, the closing of an oasis that has been a food haven for many of us who have had a craving for Ramli burgers, chappatis and keema, nasi kandar, nasi briyani, ayam penyet or a hot mug of creamy delicious teh tarik, just to name a few.

For the baby-boomers and GenXers among us, TPRS was probably one of the first ports of departure from Singapore for a trip to Kuala Lumpur or Penang as a child, unless your family was lucky enough to own a car or travelling by bus was the preferred choice.

Settling back into your seat or sleeping berth, you make yourself comfortable and enjoy the seven to eight hour journey to the accompaniment of the clatter of the train’s wheels as they roll along the rails and the visual delights of the places and people you pass along your journey.

Such a trip would usually be even more enjoyable when accompanied by friends or family but can be just as pleasing if you seek solitude and wish to be alone with your thoughts.

These days, a trip to Kuala Lumpur, for many, is by plane – the flight lasting a little over 45 minutes – followed by a short commute to the city centre by taxi or monorail. Quick and efficient; the best option if your goal is simply to get from point A to point B.

But if the journey is just as important as the destination, then riding the train will open up a whole world of sights and sounds that you would otherwise probably not have noticed.

As your train pulls away from the station and begins its journey north, you cannot help but be surprised by the green belt or nature corridors through which the train runs, especially in highly urbanized Singapore.

The half hour ride through Singapore – taking you from Tanjong Pagar through Bukit Merah, Alexandra, Tanglin Halt, Ghim Moh, Ulu Pandan, Bukit Timah, Bukit Panjang, Kranji and finally Woodlands – is like a trip back in time when times were simpler.

Back when I was much younger, the train ride allowed me a glimpse of the few remaining kampongs that had sprouted and grown along the tracks over the course of time. These kampongs are, of course, all but gone now in the name of progress and urbanization. But the ride through Singapore is pleasant enough for the verdant greenery that meets the eye.

So, as the last train pulls out of TPRS on 30 June, do give a thought to the fact that no longer will we be able to enjoy that ride through Singapore’s nature corridors.

With the closure of the 79-year-old station, gone too will be a retreat from our fast-paced urban jungle, which has always been popular destination with the port workers in Keppel Road, the office workers from Shenton Way and Singaporeans of all inclinations who come in search of a quick bite or a hearty meal on the station platform.

Stepping into TPRS is like taking a step back in time, given the station’s neo-classical and art deco façade, imposing war murals and a 72-foot high vault ceiling. In that moment, you would not be faulted if you had thought that you had suddenly been transported out of Singapore to another place, another time.

It was therefore a pleasant surprise when the Preservation of Monuments Board (PMB) gazetted the TPRS as a national monument, thereby preserving an important historical link with our past. At least, the physical structure of the station building and platforms will be preserved for future generations to see, appreciate and enjoy.

But at the same time, I cannot help feeling that with its status as a monument, the character and flavor of the station as a port of call for people seeking a respite from cosmopolitan Singapore would be somewhat diminished, especially when the bean counters start thinking about how to turn a quick profit from it.

How many times have we seen such noble attempts to preserve our heritage being overtaken by economic imperatives, often at the expense of passion and emotion, for the sake of the bottom line? It would be a mistake to approach keeping this monument alive by treating it as a business venture.

The richness of TPRS lies not only in its architecture and place in history but also in the people, some of whom (through their family lineage) have been at the station since its inception, such as the Habib Railway Bookstore. And I cannot imagine coming to the station without at least having a quick bite/drink at the M Hasan foodcourt.

It would be a shame if the station were to simply become a monument in name, an empty shell devoid of a soul, with only ghosts of the past and fading memories as a reminder of bygone days.

What is needed is an ambitious plan, a plan that is by the people and for the people, a plan that would inject new life into the place but retain the ‘feel good’ feelings of the past.

It is my hope that the station building will be put to good use, serving the needs of those of us who have an affinity for our rich historical heritage as well as those of us who find pleasure in being able to continue to enjoy the simple things in life, like a good mug of piping hot teh tarik without having to pay an arm and a leg.

Identities in Changing Contexts: Whither the Singapore Identity?

Excerpt of a paper I delivered at the Asia-Pacific Youth Forum in Nago, Okinawa, 5-14 December 1997. Even though it's more than a decade since I wrote it, the main thrust is still holds relevance today.

As a researcher, I find Singapore’s experience with ethnic-based community self-help organisations (CSHG) an interesting area for study in relation to the country's efforts to build a national identity. The promotion of CSHGs since the early 1990’s seems at odds with the moulding of a national identity.

What started out as a focused effort to improve the educational achievements of the Malay community with the establishment of Yayasan Mendaki in 1981, spawned a series of similarly constituted CSHGs beginning in the early 1990s with the Association of Muslim Professionals followed by the Chinese Development Assistance Council, the Singapore Indian Development Association and the Eurasian Association.

With each organisation catering to their own community, one cannot help wonder if this will only serve to further delineate Singapore society along racial lines, with each being more acutely aware of their sense of communal identity.

Singapore’s history suggests that the government had wanted to play down the sense of ethnic differences through its policy of multiracialism, multiculturalism and the practice of meritocracy where everyone was judged on the basis of their ability rather than their race.

A question that bears asking, therefore, is, can a Singapore identity ever evolve? Is it at all possible to establish a homogenous national identity for Singapore?

It would be easy to suggest that the answer is an emphatic 'No'. We are all too acutely aware of our own ethnic identities to ever allow it to be subsumed or even assimilated into a single identity.

The notion of identifying ourselves along the Chinese-Malay-Indian-Others (CMIO) framework is very much entrenched in our psyche and looks to stay for quite some time yet. Its most overt representation being found in our identity cards. Maybe this is something that cannot be avoided in a heterogenous society like ours.

Yet, strangely enough, when we go abroad, we tend to identify ourselves as Singaporeans, as a people from one country, having a uniquely distinct identity despite our ethnic differences. How does one explain this apparent paradox? How is it possible that the very people who see themselves as being Chinese, Malay, Indian and Others at home, suddenly adopt a super-identity, Singaporean?

It has been suggested that this strange paradox was borne of the fact that Singapore’s birth as a nation was not quite what was intended at that time. The early and mid-1960s was quite a tumultuous time for the region and especially so for Singapore. Race relations were very fragile following the outbreak of riots in 1964 and later in 1969.

While the government publicly strove to bind the people together through multiracialism and meritocracy, the private domains of the people were very much left untouched, each allowed to develop on their own. Hence, each community saw the rest as the ‘other’.

This sense of otherness may offer some explanation as to why Singaporeans tend to see themselves as distinct communities at home and as one people, one nation when abroad.

While Singapore has generally been structured along racial lines since its colonisation by the British, her economic prosperity and development has also seen the emergence of class stratification.

But even before this, other dichotomies have existed such as majority vs. minority, vernacular vs. English-educated, the local vs. overseas graduate, Asian vs. Western values, to name a few. These dichotomies suggests that at one point or another, every Singaporean could undeniably feel themselves to be marginalised.

With not golden past to return to, save those primordial links to our ethnic identities, it became logical for Singapore to be a nation of many races, many faces. But with the emergence of class as a distinct means of dividing society, racial lines are beginning to be blurred.

It has been argued that this stratification of society has been the direct result of the practice of meritocracy in Singapore. While it served Singapore well in its early years to ensure rapid economic progress and rewards for those who worked hard, it has, as a consequence, produced a society driven by material gains.

This is clearly evident by the standard and cost of living in Singapore and the aspirations of its people – the five C’s (Career, Credit Card, Car, Condominium and Country Club) being an example. This is a concern because if the class divide should become entrenched, it could result in social sedimentation and the formation of a permanent underclass.

So, with so many different factors to consider, is it at all possible to create a common identity for a nation like Singapore? Or are we fighting a losing battle? I hope not.

If our annual national day celebrations can be used as a benchmark, I am quite optimistic. It is quite moving to see people of different class, race and creed coming together in one voice, in unity, in praise of their nation. Somehow they manage to cast aside their differences to see themselves as Singaporeans.

But this is only one occasion.

There are still many hurdles to clear before we can truly say we are one nation, one people.

Maybe, that is the uniqueness of Singapore. Maybe our lack of a common supra-culture is what defines us as Singapore and being Singaporean. And in this ever globalized world, this special characteristic, this diversity may be what will see us through.

Building our future on the past

Originally written and published in The Edge Singapore about 5 years ago, this piece still holds a lot of relevance today, given the multitude of changes taking place on our shores. Old, familiar places are having to make way for new constructs that supposedly define the new Singapore.

Can preserving our ‘built’ past provide the social glue to ensure the future

The last few months (this was in early 2003) has seen at least four legacies of our past gazetted as national monuments by the Preservation of Monuments Board. They include a church, a cinema, an office building, and a hospital.

The gazetting of the former Kandang Kerbau Hospital building as a national monument appears to be the latest in the government’s recent efforts at preserving Singapore’s past heritage. The hospital holds fond memories for many of us, as it was probably where most of us were born.

The church, cinema and office building too have their own place in our own personal and collective history.

The Church of Saints Peter and Paul in Queen Street have probably seen its fair share of Singapore’s history over its 133 years of existence. So too has MacDonald House, which became the target of a terrorist attack during the infancy of Singapore’s independence. And Cathay Building, which used to house Cathay Cinema, will probably be remembered for all the great movies that we grew up with.

At last count, no less than 50 Singapore buildings have been named as monuments by the Preservation of Monuments Board.

Giving value to the past

This renewed interest to preserve our ‘built’ past has come as a surprise for some, especially following the much-publicized saga over the decision to tear down the National Library building.

However, judging by Deputy Prime Minister Dr Tony Tan’s speech at the opening ceremony of the Heritage Festival in March 2003, there appears to have been some rethinking about the value of our ‘built’ past in relation to Singapore’s future.

Dr Tan said: “Buffeted by the forces of globalisation, the information revolution and the new world order, young Singaporeans are continually confronted with questions of values, identity, belonging, and loyalty. They need answers, relevant references and roles models.

“The search for answers to these complex questions must begin with our culture and heritage. History and memories of shared experiences provide valuable lessons for us to tap on to make sense of a world where the only ‘constant’ is ‘change’. To make sense of where we are heading to, we need to know where we came from.”

Besides the gazetting of these four monuments, other efforts at preserving the past include the plan to convert the former Singapore Improvement Trust flats in Tiong Bahru into boutique hotels. (Afternote: Two flats have been converted into the said boutique hotels and promises to inject new life into an otherwise quiet enclave in the Tiong Bahru area.)

Sadly, the same cannot be said for another symbolic legacy of Singapore’s past. The Geylang Serai Market flats will have to make way for redevelopment under the Housing and Development Board’s Selective En-bloc Redevelopment Scheme (SERS).

Of course, it helps that SERS is so well received in Singapore, as evidenced by reactions from long-time residents of the Geylang Serai Market flats such as Madam Salha Abdullah, a 70-year-old grandmother. Madam Salha hopes to have the opportunity to relocate into a new flat there once the redevelopment is completed.

“I feel sad about leaving this place as I have lived here half my life. But I understand that the redevelopment needs to be done. In any case, it means that we will have a much cleaner and bigger market,” said Madam Salha.

SERS will also help to rejuvenate ‘old towns’ like Geylang Serai by allowing young families to buy a new flat and settle there.

Both plans – the conversion of Tiong Bahru’s flats into hotels and Geylang Serai’s SERS – appear to be an effort at redevelopment to preserve the spirit of the past, one cannot deny the fact that it is driven by a strong economic impetus.

Land squeeze

But given the reality of Singapore’s land squeeze, and the growing scarcity of land for development, it is not surprising that efforts at conservation, preservation, and redevelopment are inextricably tied to economic re-use.

A case in point being the designation of both MacDonald House and Cathay Building as Category 2 monuments. This means that future owners of the buildings would only be required to preserve their facades and have the flexibility to retrofit the buildings for better returns on investment.

The same can be said for the redevelopment of Boat Quay and Clarke Quay into riverside entertainment belts – although both areas appear to be in much need of rejuvenation as a result of the economic slump.

Similar attempts at preserving the past by converting historical buildings into entertainment zones include the recreation of the Convent of the Holy Infant Jesus (Bras Basah) complex into CHIJMES and the use of the former Thong Chai Medical Hall as a pub.

Sadly, the same cannot be said for a number of Singapore’s icons from the past that merit the status of being monuments. These include the National Theatre and Van Kleef Aquarium.

“I remember the Van Kleef Aquarium because I went there during my primary school, and next to it was the National Theatre with its diamond-shaped façade,” said William Lim, a 32-year-old customer service officer.

“We may have the Esplanade in place of the National Theatre and Sentosa’s Underwater World in place of Van Kleef Aquarium today, but it’s just not the same,” added William.

Ironically, the site that both icons used to occupy continues to remain vacant, merging into the foot of Fort Canning Hill.

And the same fate awaits the National Library at Stamford Road, which is due to make way for a road tunnel project.

Memories and meaning

But at the end of the day, can we keep the memories alive and retain meaningfulness for the community by simply preserving a building.

Taking a line from Professor Edwin Thumboo’s poem – to preserve the past, ensure the future – it seems to suggest that the preservation of a building by gazetting it as a monument will keep the memories alive and retain meaningfulness.

However, National Development Minister Mah Bow Tan offered a counter-perspective during the height of the National Library debate in 2000. Mr Mah said: “To ‘preserve the past’ and ‘ensure the future’ would be to actually develop the area along the lines that have been proposed, to bring back what was there in the past.”

“That really is something which is wholly in keeping with the sentiments expressed because by doing so, you not just preserve the past but do so in a way that provides an opportunity, provides an environment, provides an institution which will benefit many generations to come.”

It may not take a leap of faith to accept this view, but there still the detractors, especially when you consider the limited success of attempts to transform heritage areas such as Kampong Glam, Chinatown and Little India into living showcases of our heritage.

But the end of the day, what is important is that we are able to treasure the heritage assets that we have and build on them, weave them into a rich social tapestry that will withstand the onslaught of a more uncertain world.

Cultivating Singapore's Heartbeat

To kick of my series of postings of my past writings, I thought what better way than to review what I had written at the start of the new millennium - 2001. It was interesting to note that the article still holds itself to be generally true.

(First published in Let's Go Singapore in January 2001)

It's a new year and Singapore is well on its way into the 21st century. The economy's doing well and there appears to be a renewed sense of confidence, judging by the ruling party's efforts to get the election machinery rolling again.

At last count, Singapore's population had hit about four million people (with about 800,000 non-residents) and is expected to swell to 5.5 million by 2040. Now that's a lot of people to think about, and thinking must obviously extend beyond housing and employment as Singaporeans grow in affluence and develop higher aspirations.

The current Concept Plan 2001 Review is a good example of how practical concerns (allocating scarce land for residential, industrial and commercial use) need to be balanced against maintaining the quality of life and preserving a sense of identity (building parks and landmarks).

The outcome of the review, which will be completed by the latter part of the year, seems even more important today, given the government's commitment to realize its Singapore 21 vision.

The documentation of this vision serves as a compass to guide Singaporeans through the challenges of this new century as well as strengthens the so-called 'heartware' of Singapore, which includes elements such as social cohesion, political stability and the collective will, values and attitudes of Singaporeans.

I would like to think that this 'heartware' embodies the Singapore identity that we are trying to shape.

Granted, we had nationhood thrust upon us, thus denying us the opportunity to develop an identity that would bind us as one people. But the last 35 years has not made it easy to evolve that one unifying Singaporean identity either. We are still very much tied to our ethnic roots, which keep us apart while being a part of the nation.

Multiracialism has ensured a stable environment where all the communities were given the opportunity to develop to their fullest potential. But in multiracialism also lay the obstacles to developing a unique and unifying identity for all Singaporeans.

The need to establish that identity, that sense of belonging to Singapore, has become even more acute now as more and more Singaporeans work and study overseas, often with their families in tow. While this will certainly make Singaporeans more cosmopolitan and plug Singapore into the world, it also presents many concerns.

One concern is that a prolonged absence from Singapore can lead to Singaporeans losing touch with and feeling less attached to the nation, which brings us back to the subject of the Singapore 'heartware' and cultivating a sense of identification with and belonging to the nation.

More than anything else, Singapore's success as a nation is invariably measured in economic terms. And it is often by such terms that we identify ourselves- as evidenced in the 5Cs, the many "best" awards that Singapore wins, and the strong value of the Singapore dollar, just to name a few.

But affluence and prosperity alone cannot and will not serve as the glue to hold Singapore together. Prime Minister Goh Chok Tong himself had lamented that if Singaporeans were just economic animals, materialistic with no sense of belonging, they will be like migratory birds, seeking their fortunes in other lands when the season changes.

Taken to an extreme, such individuals will have "no cause to fight for, no community to live for, no country to defend or die for, only the pragmatic desire to get on and get rich." Such a scenario is not all that impossible, given the growing 'me-first' attitude that now permeates the citizenry.

How then do we cultivate the Singapore identity? What do we have to do to ensure that the Singapore heartbeat pounds strongly and loudly?

The government has tried to formulate some form of national identity through its Shared Values initiative, a national ideology blueprint that was adopted in 1993, and later the Singapore 21 project, which was launch in 1999.

However, in taking a top-down approach to developing a national identity, the unintended consequence was to have an artificial identity impose upon the citizenry.

Identities cannot and should not be imposed upon a people, as they would be regarded as artificial constructs. Such frameworks would not necessarily endear themselves to the very people they address or help to engender a sense of rootedness. But ironically, this paternalistic approach seems to have worked here.

Singaporeans choose to stay because of their primordial ties and a sense of belonging to their communities- arising out of the practice of multiracialism here. It is an identity that is borne out the people, through their daily struggles to make ends meet in the thriving city-state.

If anything, I would regard this as the defining character of the Singapore identity. It is our diversity that makes us unique as a nation. We are much like the multi-coloured items of a salad bar, where each item adds a different taste sensation, able to exist on its own and yet contributing to the whole experience.

But does this diversity not lead to tension? Yes and No. Yes, when competing communities are allowed to further their own agendas without any restraint. No, because it is the very restraints that have been put in place by the government that allows our diverse communities to exist harmoniously.

It may very well be that Singapore needs a combination of top-down and bottom-up approaches towards cultivating its identity. The bottom-up approach seems to have grown in importance now that the government has committed itself to the Singapore 21 vision.