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Southeast Asia

Singapore lays down its chips
By Aileen Saw

SINGAPORE - The tiny but fierce island state of Singapore, which in the past has made headlines by banning chewing gum, bungee jumping and bar-top dancing, is getting "happening" in a hurry. The latest government plan to loosen up Singapore's squeaky-clean image, while also attracting more foreign visitors and investment, involves none other than building the country's first resort-style casino.

The plan, due to be decided by the end of this year, was first developed in 1991 after some government officials expressed their desire for a slice of the forbidden gaming fruit; according to gaming consultant Kelvin Tan, from Manila-based investment firm Sinorex Holding, Asia's legal gambling business is estimated to be worth US$13 billion annually, while US consultancy Innovation Group has pegged "floating casinos" and illegal gambling at $4.2 billion a year. The initial plan was rejected at the time, but it has recently been revisited by Trade and Industry Minister George Yeo, who has described the proposed casino as an "international facility, with more relaxed rules to attract international talent, visitors and investments".

The plan has its share of critics, including Senior Minister Lee Kuan Yew and Prime Minister Goh Chok Tong. Those voices could largely be quieted, however, when Lee's oldest son and a strong advocate for turning Singapore into a gaming center, Deputy Prime Minister Lee Hsien Loong, takes over as prime minister next Thursday. At that time, the drive for casino development could begin to heat up. And what "chili padi" Singapore strives for it usually gets.

Back in 1965, Singapore separated from Malaysia. It then fended for itself once again when the United Kingdom announced the withdrawal of its troops in December 1971, reversing an earlier commitment to provide security coverage to the tiny island state. The British army at the time contributed to 20% of Singapore's gross domestic product (GDP) and employed 100,000 locals. But Singapore survived, proving that it isn't necessarily the size of the proverbial dog in the fight that matters. Singapore now enjoys one of the highest per capita GDPs in the world - $24,000 according to a 2002 World Factbook estimate.

With virtually no natural resources, the Singaporean economy depends heavily on exports from its electronics and manufacturing sectors. However, since the 2001-03 global recession and the resulting slump in the technology sector, the government has been looking for a new game plan, one less vulnerable to the external business cycle. While it is unlikely to give up its original designs on becoming the high-tech and financial hub of Southeast Asia, the government is hoping that even when people can't afford flat-screen televisions or the odd unit trust fund they can still spare a dollar or two for the card table.

Singaporeans already spend about $340 million annually in casinos in neighboring Malaysia and Indonesia. A favorite Singaporean pastime is going on a cruise - they reportedly spend in the vicinity of $400 million a year on board floating casinos. According to GK Goh Research economist Song Seng Wun, taxes from lotteries already make up a tenth of Singapore's $16.5 billion tax revenue. Business Times estimates that a full-blown casino in Singapore could create up to 1,000 jobs and earn $235 million to $335 million annually for its operators.

Phrases used to describe Singapore typically include "highly developed", "successful free market", "remarkably open", and "corruption-free environment". Next to those words, however, one might also find the phrase "nanny state", although, according to Prime Minister Goh Chok Tong, who unapologetically addressed the phrase coined by foreign journalists in his 2003 National Day Parade rally speech, "Singaporeans like it that way."

Singapore is certainly no stranger to gaming, with state-run lotteries, aforementioned casino cruise ships, horse racing and the occasional illicit poker and mahjong dens. But in the same vein of double standard that allows a man to appreciate less conservative attire on "that woman walking down the street" but not on his wife or daughter, many Singaporeans have reacted strongly to the idea of turning their beloved coddled country into a "village of sin". Gambling on board floating casinos that call on Singapore's shores and open for business in its waters apparently doesn't count.

The Singapore National Council of Churches has waged a blistering attack on the casino idea, spearheaded by the scathing argument that "Singapore is not so poor and desperate that we have to depend on revenues from casinos and gambling".

Among the ranks of fierce naysayers have been Singapore's Islamic scholars, and several high-profile government officials, including former prime minister and current Senior Minister Lee Kuan Yew, who has said he is "dead set against" government plans to build Singapore's first resort-style casino. Weighing in on the same side has been Prime Minister Goh, who declared in 1991 that a casino would never exist in Singapore so long as he was leader. Significantly, next Thursday Goh relinquishes leadership to the younger Lee, who is largely in favor of the casino.

The division in the ranks of the People's Action Party, Singapore's leading political party, marks a significant change in the island state's administration - though not so much because of the difference in opinion. Even after a decision is made on the casino, Singaporeans are likely to be debating the issue till the cows come home.

What makes this division significant is the fact that Singapore's most prominent politicians have agreed to disagree publicly, while Singaporeans debate openly in chat rooms and newspapers. In a nation characterized by differences most often settled discreetly - if not efficiently - behind relatively closed doors, giving everyone a voice in which to settle this particular debate may signify a loosening of the apron strings.

Outgoing Prime Minister Goh has publicly dismissed any suggestions that keeping both himself and Senior Minister Lee in the cabinet will "cramp the style of the new prime minister". As Goh put it, "Now, when I allow bungee jumping and bar-top dancing, it is not because I encourage these activities. You will never find me dangling from a bungee cord, or dancing on a bar top. But you may find me watching a bungee jump, and perhaps one day I may go and see why dancing on a bar top gets some people excited." One small step for the Singaporean administration, one giant leap in loosening up.

Meanwhile, the senior Lee, 80, often dubbed the "Father of Modern Singapore", has indicated his continued involvement in the government. But he has also reiterated that he will not stand in the way of what he predicts will be even faster change by a younger generation of ministers led by the younger Lee. "I am responsible for my children's upbringing, and not my grandchildren's," he said. The senior minister may have seen Singapore through the decades - from newly independent, fledgling nation to having achieved developed-nation status - but his most heroic achievement to date may be the ability to learn to let go.

Singapore has come a long way from being a "castoff baby", in the words of Goh. The fact that many Singaporeans are debating their country's image and the environmental consequences of increased development as much as the social effect gambling may have is telling. Perhaps Singaporeans should have a little more faith that highly regulated, responsible gaming may be a niche that Singapore could build on better than anyone else in the region.

True, Singapore is clean, safe and relatively crime-free. But it's not the money in need of laundering that finds Singapore attractive; people in search of such pastimes have better places to go. And if Singapore does decide to open its arms to embrace the world of legal gambling, perhaps so will Singaporeans.

Aileen Saw is a former manager on the risk management advisory team of HSBC's Treasury and Capital Markets Department. She has an accounting degree from Nanyang Technological University in Singapore.

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Aug 7, 2004



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