Singapore, the safe haven
By Aileen Saw

SINGAPORE - Walk along an average Singapore street alone at 3am, and you are likely to go unmolested, regardless of whether you're an 80-year-old man or a 15-year-old schoolgirl. Skate-boarding teenagers careering around a deserted Raffles Place won't even give you a second glance. Chew gum and you might get a few looks, but we all live dangerously sometimes.

Singapore's reputation as a safe haven, combined with its squeaky-clean image, lack of corruption, strict meritocracy and transparency, have made the island nation a hot spot for investors. At a time when Enrons and terror threats are on the minds of most individuals, the economic environment Singapore offers has made it a joy for those seeking to build up their investments.

Despite having an area of only 648 square kilometers, few natural resources and a small domestic economy, Singapore has succeeded in becoming one of the world's top trading nations, is consistently ranked as one of Asia's best business destinations and has been recognized as one of the most competitive economies worldwide. In 1999 the World Trade Organization ranked the tiny island city 16th among the largest trading nations in terms of both services and merchandise trade. From 1979 to 2000, Singapore's total trade grew about seven times.

In addition, all policies and procedures are readily available on the websites of various government bodies such as the Monetary Authority of Singapore (MAS) and the Economic Development Board (EDB). According to the EDB, Singapore has signed investment guarantee agreements (IGAs) with 31 countries and regional groupings to date, with 10 more in the pipeline. As the EDB defines them, the IGAs "help to protect investments made by Singapore-based companies in other countries against non-commercial risks". These protections allow for the "fair and high-level treatment" of investments by Singapore companies, the repatriation of income earned in the city state, an "objective dispute settlement mechanism" and "compensation in the event of expropriation or nationalization".

Other reasons for ranking Singapore as a financial and business hub are the free-trade agreements (FTAs) that facilitate trade between businesses in Singapore and countries around the world - Singapore was the first Asian country to sign an FTA with the United States, which also is Singapore's largest direct foreign investor and second-largest trading partner. Where IGAs protect Singapore-based companies in other countries, FTAs remove barriers to trade and investment, thereby "creating freer flow of goods, services and people". Singapore also has FTAs with Australia, Japan, New Zealand, and members of the European Free Trade Association, among others. With the effective signing of these agreements, multi-national companies have greater flexibility to move capital resources and staff around, among other things.

Not that foreigners need much persuasion to pick Singapore if their companies decide to relocate them and their families somewhere in Asia - you can walk along your average Singaporean street at 3am unmolested, remember? And with English as the medium of instruction and large government expenditures on education, Singapore isn't a bad place to send children to school either.

Low crime versus no crime
With adages such as "low crime doesn't mean no crime", the Singapore government is out to protect the country from the gum-chewing scum of the universe - literally. Ironically, the much-publicized gum ban has done little to stop Singaporeans from actually chewing the stuff - over in neighboring Johor Bahru, Malaysia, sales of Wrigley's and Bubble Yum must have quadrupled, as gum has become the No 1 "cool item to buy for friends when traveling abroad". And because only the ban on therapeutic gum (ie, the kind that helps one quit smoking) has been lifted, 7-Elevens and gas stations across the causeway will continue making a killing on chewing gum and other frivolous items.
But while the gum ban may have failed to reduce the number of gum-chewing individuals, it has been utterly successful at keeping the country clean (one will be hard pressed to find leftover gum marks on public property). And perhaps that's Singapore's best-kept secret: some of its seemingly eccentric and over-the-top rules and regulations do achieve what the government intends, cleanliness, even if they don't stop people from chewing gum.

That's important because it's not just corporate dollars that flow Singapore's way. The relatively crime-free environment has attracted Indonesian money during the racial riots that occurred there, as well as Taiwan dollars from those wary of investing in Hong Kong after the 1997 handover to China.

Singapore also attracts some of the keenest minds from Asia's labor pool, because it offers such carrots as the ASEAN (Association of Southeast Asian Nations) and SIA (Singapore International Airlines) scholarships. This means companies setting up business in Singapore have the pick of the crop in terms of fresh hires; though some of that crop will be headed for government. The problem with that is the government likes to try to keep the best students in government offices by using both "carrot" and "stick" methods to attract the best and discourage corruption. Singapore officials are some of the highest paid in the world, and if you break a government scholarship bond after having benefited from a cushy university experience at the expense of the Singapore government, you are likely to find your name listed in the local newspapers.

The key word in Singapore is, of course, efficiency. If you get off at the Redhill stop on Singapore's Mass Rapid Transit (MRT) line, you will find entire government housing blocks with one- or two-room units allocated to the elderly and within walking distance of the train station. Some have argued that housing zones should be more integrated, at least so it doesn't look like the old and infirm are being shipped off to a particular part of Singapore. The rebuttal, however, is logical: the housing blocks for the elderly are fitted with medical emergency "panic buttons" or "ropes". The areas are also situated near hospitals, facilitating rapid response times during an emergency. In addition, with large groups of the elderely and needy housed in the same area, it becomes much easier to deploy junior college students or social workers to deliver food and supplies to them.

Keeping track of living conditions and social work teams becomes more economical in terms of time and resources, just as more stringent rules and regulations ultimately lead to a better economy for a nation that has virtually no natural resources and relies heavily on its conducive business environment for success. And for now, Singapore's reliance on its safe-haven image is working well to prove that when it comes to economic stability, it's not the hand you're given, it's how you play the cards you're dealt.

Aileen Saw is a former manager on the Risk Management Advisory team of HSBC Singapore's Treasury and Capital Markets Department. She has an accounting degree from Nanyang Technological University in Singapore and can be reached at aileensml@yahoo.com.sg.

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