Singapore is experiencing a brain drain
Singapore and the Asian Crisis / Rolf Hanisch - [Electronic ed.] - Bonn, 2001 - 19 p. = 62 KB, text. - (FES analysis)
Electronic ed .: Bonn: FES Library, 2001
© Friedrich Ebert Foundation
In July 1997, after some speculative currency attacks, Thailand had to freely float the baht and thus drastically depreciate it. The currency crisis hit Thailand through no fault of its own, but it did hit Thailand unprepared. It expanded into the "Asian crisis" when the currencies of many neighboring countries came under pressure and also had to devalue drastically. This development resulted in an economic and social crisis, and in some countries (Indonesia and Malaysia) also a political crisis. In Indonesia there was one regime and two changes of government, in Thailand and the Philippines two, in Korea there was a change of government, which were more or less caused by the crisis and crisis management. The Thailand crisis initially infected the other regional economies in that speculators believed they had discovered similar weaknesses and imbalances in these too, and reacted to them. Domestic and foreign owners of liquid capital with no short-term speculative intentions withdrew their funds from the endangered currencies in order to avoid asset losses.
In a devaluation spiral or a stock market crash, a cool and factual analysis is hardly possible. The normative force of the factual determines the course of action. The courses fall because relevant participants want or believe that they will fall - and that in turn sweeps others away. This process, referred to in journalism as the “herd instinct”, can at times lead to unjustified exaggerations of the possibly necessary correction. The prerequisite for this is an open capital flow regime. Economies whose currencies are not directly affected are infected by the crisis if their real economies are networked with the crisis economies or if they are in global competition with them.
The wealthy and efficiently run city-state of Singapore was geographically close to the heart of the typhoon. The Macroeconomics was in perfect order, the microessentially also economy. Through his real economic embedding in the crisesregion, the trading state was still verwonderful and therefore stayed not untouched by the crisis. Thanks to his peculiarities, however, he managed a "soft" and ultimately only short one Landing.
Like the other crisis countries (with Ausassumption of the Philippines) also has the citystate in the last few decades a stormhe experienced a development in 1997 (prevpassing) to the top in the world (gemessen am p.c. GDP in PPP $). The prerequisite for this was, among other things, a high investment as well as high savings rate, which from the mid-1980s always clearly exceeded the domestic investment rate. The city-state also did to attract an evenly high influx of foreign direct investmenthen that, judging by the Gross capital balancedung, is higher than in any other country in the world and its absolute height is only very high is surpassed by a few dynamic large states. The state budget could not only - as in some others Crisis states - to be balanced, but generated significant surpluses. Including the distributed profits of public companies, interest income and sales income (especially for land), current and development expenditures of the public budget (excluding loans from public companies) were significantly below the aggregate government revenues - in recent years less than half. This enabled considerable state reserves to be built up. In 1996/97 these amounted to no less than US $ 108 billion net (S $ 152 billion, 114% of GNP). They also increased further during the crisis (1998/99: US $ 138 billion, 158% of GDP).
Also international reserves in the form of foreign exchange and wealth Singapore was able to accumulate in a similar manner. Unlike the other crisis states in the years immediately before the crash, the city-state had one solid positive current account balancei.e. he exported a little more goods than he imported and at the same time clearly had one positive balance of services. The balance has been no less than 15-16% of GNP in recent years. Some of these surpluses were invested abroad. Direct investments abroad were encouraged by the state, other investments were not hindered. Despite the still high level of FDI in the country, Singapore has been since the 1980s Net capivalley exporter. The fixed assets of foreign companies in Singapore are now estimated at US $ 93.5 billion (end of 1997). The fixed assets of Singapore-based companies, about half of which are foreign-owned, abroad amounted to US $ 47.5 billion in 1997, the value of portfolio investments to US $ 15.2 billion and other assets (in particular on cash accounts and loans) to US $ 36.3 billion. The currency reserves of the Monetary Authority (MAS) amounted to US $ 80.5 billion at the end of 1997. This is offset by foreign debt of US $ 8.4 billion (1995), including $ 1.2 billion in short-term liabilities. So they are irrelevant.
No less important than quantifying thiseconomic ones are probably the political onesbetween "Fundamentals". In Singapore lacks the crony economy, the individual verquicking the political-bureaucratic and the economic elite. The political officethe critical elite do not work for God's wages as officially their poor work Relatives in neighboring states. She pays lush Geholder, by far the tallest in the world that is to the manager salaries in the Priorientate the father economy. They are paid out over the table and not moved below. However, lately there have been tender ties between bureaucrats and business - for example, through consultancy agreements between parliamentarians and business enterprises.
The free development of civil society, in which interest group claims are articulated, is severely restricted. This is how the technocratically run state appa is securedcouncil great autonomy, objective, expedient decisions to fell and also to implementZen. To anchor himself in society, he uses numerous permanent and ad hoc advisory bodies. These are usually chaired by a minister and, in addition to senior civil servants and politicians, representatives of the private sector also work. The latter are not necessarily legitimized by associations; they are often managers of large (including foreign) companies who are appointed to these committees on the basis of their functional expertise. These committees advise and inform the technocrats about social interests and wishes with a high degree of acceptance. The aim is to get the GeFeelings to grasp the opinions and wishes of the population, since you meanwhilehas recognized that an efficient techdemocratic politics without this socialfeedback is hardly possible. The In this way, the state apparatus also preserves its stability and autonomy, and is not created by individual interests captured and privatized, still through social particular interests come under serious pressureputs.
For the area of the private and the criminalright - with restrictions for the statelaw and civil rights - a constitutional state has developed. The state, i.e. the government through parliament, sets the rules. Interpretation disputes and rule violations can be brought to court with the prospect of an objective decision or are sanctioned by state organs.
This also has consequences for the corporate sector and so-called "corporate governance". Elsewhere in the region, incalculable legal relationships, especially for the Chinese minorities, have contributed to the development of family businesses or to conglomerates run by family members (non-professional managers) in larger (Chinese) network economies. Through this one is able to deal with outsiders - including the tax and regulatory state! - seal off. Business is done on the basis of mutual trust and with a handshake, not with written contracts, as the latter would be difficult to sue in case of doubt. This legally unsecured terrain is secured by cultivating relationships with members of the political-administrative elite. This is how the friendship and clientele economy develops. The hunt for politically mediated pensions and state aid that can be accessed more or less at any time creates a "moral hazard“-Problem, increasingly displaces risk-conscious and long-term oriented entrepreneurial decisions and makes these corporate conglomerates as vulnerable as the crisis then relentlessly exposed. In Singapore, however, the situation is different.
Private entrepreneurship was only able to develop rudimentary here beyond the medium-sized and banking sectors. Initially, this was actively ignored by the state. Funding has been available with moderate success for around two decades. The corporate economy is still dominated by transnational corporations (TNK) and government-linked companies (GLC). Around two thirds of the market capitalization is held by GLC, i.e. partially privatized state-owned companies. In the oppositesentence to the otherwise widespread practice in the region, Singapore does not use GLC as a "utility company" for Managers and staff managed. Like the TNK anyway, they are run by professional manager-bureaucrats directed that according to performance criteriarien are selected and which together generate substantial profits. The fact that companies and the entrepreneurial culture in Singapore differ from those usual in the region is also evident from the fact that entrepreneurs have to overcome considerable adjustment problems when making direct investments abroad (e.g. in China) and have to adapt if they want to be successful. Obviously this only succeeds after a few losses, about which we don't know very much, however.
Lack of transparency seems a common thingsame problem from Singapore and the beneighboring crisis countries be. She was at least for the latter as having the crisisdiagnosed causative deficit. At first Singapore looks specialders intransparent. Unlike in some KriThere are no free media in sen states and no investigative journalism. However, since the apparently free, state-not censored media in neighboring countries are often part of larger economic conglomerates or the journalists are poorly paid and therefore corrupt, business journalism there is correspondingly poor and unreliable. For Singapore, on the other hand, he receives comparatively benevolent assessments - in terms of regional and corporate reporting in the city-state. Critical political reporting, however, is not giventolerates. Foreign media that potentially have a large audience due to the widespread knowledge of English can whowho are systematically punished for criticism and, in the meantime, probably also, like quite a few, fromrural and local scientists in the country, intimidated to the point of self-censorshiptert. However, it speaks in favor of Singapore as a location (and probably against these commercial companies) that many media groups have nevertheless set up their regional center here, from which they report about and for the region, but not about the city.
The administration operates a selective information policy and also keeps it privatecompany, especially the Banks, on this. On the one hand, extensive, meaningful and meaningful data are obtainedlifted and released. The user can safely assume that this was collected as correctly as possible and also not manipube lured. On the other hand, individual areas are considered sensitive, and here it is by numerous financial dabut not published by the governmentpublic. Nor does she let herself go through Anask questions in parliament and the public to do so. Private research or unShe is looking for tight spots partly by drakonicease penalties.
The lack of transparency is just a problemborderline problem, as they are not for abuse of office and first unlawful self-privilege on a large scale in publicsector is used. Even simple management failures are not tried to be swept under the rug, but rather to be sanctioned, even if not necessarily in public. Second, the administration has the Informations. She can take them into account and work with them. This is often not the case in neighboring countries. Third Selective transparency should actually be poison for the Singapore financial center with the claim to regional or even global importance, since financial managers are actually dependent on unfiltered, comprehensive and fast information. The complaints of the financial world about a lack of transparency, however, are limited. Occasionally, financial journalists and managers are supplied with confidential information and involved with it.
The Asian crisis, however, gave the impetus to also give way on information policythink. A Committee on Banking Disclosure examined the publication practice in other countries and presented its recommendations in May 1998 for greater disclosure requirements for local banks. A foreign public relations company was commissioned at the end of 1998 to carry out an attitude analysis of journalists and business people about their information needs. The findings and recommendations of this study were not published, possibly because they did not signal an urgent need for action.
Of course, the city-state could not completely escape the regional crisis. In terms of the real economy, Singapore is closely linked to the crisis countries and has been increasingly linked in recent years. Approx. 60% of the exports go to Asia, roughly in equal parts (27%) to the ASEAN countries and to NO-Asia. The expansion of this regional trade increasingly involves intra-company trade, i.e. trade between different TNK production sites. In 1996 he accounted for 65% of trade with Malaysia (1992: 50%), 53% with Thailand (1992: 48%), 58% with North Asia - but only 45% with North America and 38% with the EU. Singapore companies placed 57% of their foreign direct investments in Asia in 1996, 29% in the ASEAN countries alone. In addition, there are portfolio investments, loans, etc., for which no regional breakdown is published about the investment. As a service, trade and tourist center, Singapore is in many ways linked to the states in the region. Around a third of foreign direct investment in the country - with a focus on the financial sector, manufacturing industry and trade - have their originsjump in asian Countries, which are about a tenth of the productive investmentcontrol in the country. The tourism industry has only been able to grow somewhat in recent years due to the influx of Asian visitors (1996: 73% of all immigrants). However, this target group stayed for a shorter time and bought less in the now quite expensive “shoppers' paradise”.
Almost all currency controls had been abolished since 1978. The only restriction remained the separation of the domestic credit market from the Asian dollar market, i.e. no lending outside the country in S $ was allowed. The attempt was made to prevent the internationalization of their own currency and to hinder possible speculation with it. The currency is covered to more than 100% by foreign exchange reserves in a currency board system and is regulated by the Monetary Authority of Singapore (MAS) within a narrow fluctuation band compared to the currencies of the most important trading partners. This enabled currency volatility to be kept relatively low, but appreciated by 32% in nominal terms between 1987 and 1995 and by 18% in real terms against the US $, thus keeping the rate of price increases in the country low.
Apparently there was no speculation against the S $ during the Asian crisis. However, the capital account shows an increase in the deficit for 1997 and the following years. In 1997, the most noticeable capital movement was a drastic increase in the outflow of “other investments” (ie essentially of loans) from banks and the non-banking sector, which, however, was almost offset by a comparable inflow in this area. In 1998 the outflows flattened again significantly, while the inflows were temporarily dramatic turn around with net outflows (from S $ 53 billion in 1997 to - S $ 26 billion in 1998). In particular, the foreign banks in the country - due to the currency uncertainty - felt compelled to make money transfers out of the S $.At the same time, loans to the Asian Dollar Market were increasingly being repaid. Official statistics do not record the share of short-term capital. Inflows and outflows of the portfolio capital show no significant changes. In 1997, direct investment abroad continued to rise, and in 1998 a temporary net return.
The drastic devaluation of the currencies of neighboring countries threatened a deterioration of the competitive position of Singapore, even if it would keep the relation to the dollar stable. The MAS therefore increased the intervention band and caused the S $ to depreciate against the US $ (by - 18.6% by the end of 1998). It also depreciated against the yen, NT $ and HK $, but all in all the S $ remained appreciated against the other ASEAN currencies and the won due to the crisis. In fact, Singapore also experienced a slump in its exports of goods (12%, 1998) and services (37%), calculated in US dollars, as well as expenditure on imports of goods (23%) and imports of services (9%). For the domestic economy, stagnation in exports of goods and a decline in imports of goods (13.6%) were calculated (in S $).
The tourism industry was also affected by the regional crisis. Visitors from Asia (1998: 13% fewer) and especially Southeast Asia (19% fewer) came significantly less than in the previous year and also tried to make their stay more economical. In 1998, visitors from Southeast Asia spent 30% less per day of stay than three years previously (all tourists together 7% less). This was closely related to the decline in the number of purely tourist visitors staying in hotels.
The decline in tourism exacerbated the situation in the hotel and retail sectors, both of which had previously been in trouble. The real estate market had boomed until 1996. (Partially) privatized state-owned companies also took part in it, whose fields of activity had not previously included real estate and project development, but who did not want to leave this lucrative market to others. Led by free market home ownership prices (1990-96: 305%), prices for industrial land (251%), offices (172%) and retail stores (129%) had risen sharply. Meanwhile, however, vacancies had emerged and retail rental prices were clearly on a downward trend. The government tried to counteract this by expanding its land sales. This had the effect that in the three years 1995 to 1997 it doubled its income in nominal terms compared to the three years before, and land sales had become the most important item of income (28%) since 1994/95 - even before income tax. However, they have not contributed to any significant dampening of the asset bubble. The restriction of housing loans to foreigners and the introduction of a speculation tax on real estate in the event of an early sale (mid-1996) "was too little, came too late". The crisis now led to a significant slump that was only to bottom out in the third quarter of 1999. Real estate prices for retail stores fell to 1988 levels, office space to 1990 levels, office rents fell to 1994 levels, retail rents to below half of 1990, hotel room prices to around 1990 levels.
Overall, the economic output of the hotel and restaurant industry collapsed by 3.5% (1998) and that of wholesaling and retailing 4.1%. From the second quarter of 1999, however, both branches of the economy were able to recover. Under these conditions it was not surprising that the construction sector also slumped the most in Singapore (1998 + 4.4%, 1999: -11.8%), while the industry, which already experienced significantly weak growth in 1996 and 1997, only fell moderately (1998: - 0.6%) and in 1999 it grew again by double digits (+ 13.8%). While the state is withtried to counteract this, the private sector wanted in the Invest significantly less in the crisis (1998: - 9.9%, 1999: - 4.7%). Business in the financial sector was therefore also significantly worse. This was also directly affected by its loans to the crisis countries - which corresponded to around 15% of the total fixed assets. The contribution of the financial sector to GDP shrank by 8.1% (1998) and has not yet recovered in 1999. The banks were faced with an increasing number of borrowers who no longer served their liabilities (non-performing loans = NPL). Provisions had to be made for these, which was paid for with a significant drop in profits. However, the increase in the NPL in relation to all loans was rather moderate in a regional crisis comparison. The banks in Singapore did not come to the edge of the abyss and beyond, like in some other crisis countries.
Overall, Singapore managed a soft lanmanure. The stock exchange anticipated the development in the city-state and, as usual, oversubscribed it: With significantly increased and in these years also continued to rise sales, it slumped 24.3% (1997) and another 7.6% (1998). In 1997, GDP still recorded a remarkable and so far usual growth of 8.4%, which then approached zero in 1998 (0.4%). In 1999 GDP rose again by 5.4%, in 2000 by 10.1%. The Straits Times Index boomed 78% to an all-time high in 1999 and then flattened again. At the beginning of 2001 the index was roughly at the pre-crisis level. The Economic growth prospects for 2001 are not assessed very rosy, with 4 to 5% expected.
It would be surprising if the interventionnistic state in Singapore is not also verlooking for, in the crisis to take countermeasures, to cushion them, to make the best of themchen. An attempt was made to improve the sales and cost situation of companies in the country through short-term measures. In view of the extensive state treasury and the lavish budget surpluses to date, however, they waited a relatively long time fiscal Measuretook to stimulate demand. A supplementary budget was only passed in mid-1998, which was followed by a comprehensive tax reduction package in November 1998, including a 10% reduction in the already low corporate and income tax. At the same time, investments in public housing, the expansion of the metro, sewage and garbage disposal and land reclamation were increased considerably (in 1998/99 by a total of 37%). The publicThe one investment could thus be usedbreak the Although not completely compensating for private investments, they do attenuate them. That worked for the private one Consumption not. If the national accounts are followed, this decreased as the private savings rate increased. In uncertain times, people save, not consume.
The finance minister expected a budget deficit of 0.5% for 1998/99 and even 3.5% of GDP for 1999/2000 due to falling tax revenues and increasing expenditure. However, this "deficit financing" only related to current (mainly tax) income in relation to current and investment expenditure. The state's investment and capital income were not taken into account, which at least contribute 35-40% to total state income. In fact, the operating budget ended up showing a surplus in both years. For the 2000/01 budget, some tax cuts have already been withdrawn and a surplus has been estimated for the operating budget.
Current expenses are controlled. This was achieved through the freeze and then at the beginning of 1999 through a cut (1 to 5%) in civil servants' salaries and a 10% cut in ministerial salaries. However, the salaries of politicians and civil servants had increased considerably in the years before the crisis. In mid-2000, the crisis was declared over and public sector salaries were raised by an average of 13% - with a range between 4 and 50% at the upper end! - at. The prime minister was now able to enjoy an annual income of S $ 1.9 million (US $ 1.1 million) and a junior minister still had almost S $ 1 million. This significant increase in the already high salaries, which are based on top incomes in the private sector, was already controversial, but now met with broad public rejection, which was reflected in the media.
Of course, there were no fiscal reasons for lowering and then increasing salaries in the public sector. Rather, the attempt was made to legitimize the general wage cost reduction that was considered necessary as part of a comprehensive cost reduction strategy (including through improved depreciation options, fee reductions, etc.) for private companies in order to strengthen them from this side during the crisis.
At the same time one was looking for wage flexibilityactivity, layoffs and unemployment fargoing to avoid. The prerequisites for this were not bad. There is practically full employment in Singapore. Foreigners are employed in all areas (1998: 28% of the workforce). These are particularly strong in the low-wage groups (in 1998 44% of the workforce received less than S $ 2000 per month). These actually undesirable, nevertheless, more and more useth unskilled workers are an industrial reserve army, with the one turns around quite rude and tries to prevent their roots in the city-state. In 1998, the two-year employment contracts were shortened to one or two years - in order to be able to act even more flexibly.
In order to discourage the employment of unskilled workers, their employment was made more expensive by a levy that is graduated according to public desirability. As a cost relief measure for companies, this was reduced in the industry and the navy in 1998. The very high levy for domestic workers and unskilled construction workers was excluded. At the same time, a qualification certificate was stipulated for construction workers, which they have to produce in their home countries. The aim is to use these and other measures to increase productivity in the construction sector, reduce its costs and make it exportable.
The crisis in neighboring countries feared an exacerbation of the problem of illegal immigration and an inundation by refugees from poverty. The illegal border crossing on both sides and the exceeding of the residence period were already punishable. The sanctions, such as jail, fines and blows with a stick, were tightened again in 1998. The "attempted illegal border crossing" also became a criminal offense. The burden of proof of innocence was placed on the foreigner. Employers who employ illegals are also liable to prosecution. The controls were intensified. In 1997 14,000 "illegals" were apprehended, in 1998 it was even 23,000 - the highest number since 1990.
In the area of wage policy for SingaporeaniThe state now has only a relatively limited number of employees Possible influenceopportunities even if the (tri-lateral) National Wage Council that it controls can make more general “recommendations”. The relatively high wages are more or less negotiated on the market. However, following the crisis in the mid-1980s, people pushed for flexible wages, which since then have consisted of a base wage, annual remuneration and other bonuses. In 1987, the variable wage component was still an average of 12% of total wages; it is now around 17%. The companies in trouble now have the opportunity to cut their labor costs by cutting bonuses. However, no data is available on how many companies have made use of this option. Overall, the increase in average monthly wages halved to 2.8% (1998) and 2.7% (1999).
The state can still exert direct influence on the level of levy for the Central Provident Fund. This compulsory savings tax - which incidentally has poor interest rates - was originally a funded individual old-age insurancetion has been set up, but can now be used for certain expenses in part even before retirement from working life. By far the most important use is for the purchase of condominiums. Since 1994 the levy has been 40% of the gross wage, half of which is to be paid by the employer and half by the employee. This means that it increases the wage bill by 20%. This is not a little for companies under stress. However, lowering the employer's share must be particularly unpopular with the many workers who use it to pay for their mortgages. The government therefore hesitated for a long time before halving the employer's contribution to 10% (in November 1998 to January 1, 1999). From April 2000 it was raised only slightly to 12% - which was probably not insignificant to feed the displeasure with the lavish increase in ministerial salaries.
Unit labor costs in industry couldoverall by 1.4% (1998) and an impressive 18% (1999) become. Along with the reduction of other loads - Serservice costs, taxes and duties - is that Unit cost index of the industry (“Unit Business Cost Index ") meanwhile back at the level of 1989-90.
There were also layoffs in Singapore, if you follow the official data, mainly in industry and especially in the electrical industry, less so in the construction and financial sectors, as in other countries. Unemployment doubled from 45,000 (1997, 2.4% of employees) to 90,000 (1999, 4.6%). That is less than in the mid-1980s crisis (1986: 6.5%) - visually less than in neighboring countries, but still within sight. However, this formal comparison overlooks the fact that practically only wage earners can become unemployed. Small self-employed people and their family members who work for them seldom lose their own jobs during the crisis. They can no longer fully utilize their working hours, so they are underemployed or have to lower their labor productivity even further, so they may work longer for a lower income. In the agricultural countries, the share of wage earners in employment is significantly lower than in Singapore. In Indonesia, for example, 33% of employees are wage earners, in Singapore 85%. During the crisis, unemployment rose only slightly in Indonesia from 5% (end of 1996) to 6.4% (end of 1999) of all employees. If one applies unemployment only to all wage earners, the picture is different. It rose from 13% to 17%.
Also in Singapore were from the jobyoung people, i.e. young professionals, are most affected. However, they remained unemployed for a shorter period than the older ones. It hit the less skilled arworkers something stronger than the qualifierten. But also the college graduate mustusually took their first job a little longer search than before. In 1997 there were 95% within six months of taking the examfound a position, In 1998 there were only 83%.
In Singapore, too, there are involuntary part-time workers and underemployed people. 2.3% of all workers were there in June 1999. The crisis has certainly also reinforced the previously pronounced tendency to “job hopping”, which is more or less the same among all levels of education and between the sexes and is especially cultivated by the twenty to thirty year olds. In the two years up to June 1999, 17.4% had changed jobs one or more times (5.5%). From mid-1999 the workforce became scarce again and companies increasingly encountered difficulties in filling their vacancies for qualified workers.
Since crises can initiate or intensify long-term distortions that make it more difficult to stay on course on the previous tracks, as well as offer new opportunities that need to be used, Singapore is of course not limited to crisis management. In Singapore, too, the government seeks advice in crisis situations. Not in the Abpoint of view, controversial and difficult decisionsto push ahead of oneself, but to get away from it Let experts develop well thought-out concepts in order to provide the private sector with their practical knowledge and Inteintegrating ressources without, however, giving up the autonomy of the decision-making process. The so Concerned recommendations each have a good chance of being politically acceptedto be implemented and implemented, often already before submitting the overall report. In no case do you want to be “too late”. For example, shortly before the crisis, a "Committee on Singapore’s Competitiveness" was set up, which presented its report in October 1998 with recommendations on how Singapore could "become a developed and globally competitive knowledge economy" within the next decade. Another “Financial Sector Review Group” dealt exclusively with the financial sector; its sub-committee “Committee on Banking Disclosure” presented its recommendations in May 1998. Other committees thought about areas as diverse as creative arts education, productivity and efficiency gains in the construction industry, and more.
A revision of the previous development strategy is not recommended, that would also be nonsensical. Thought is being given, however, and the conclusions will be largely implemented, as to how Singapore can expand its position in the increasingly globalized system. It seems to be far in the city-stategoing to agree on that a "hold" of the buttockssition, in the sense of updating the toprevious politics and strategy in the dramatable changing world is hardly possible. If Singapore does not change, it will hardly be able to maintain its prosperity. Due to its vulnerability as a small state, one has the idea of having to be “world class” in order not to go under. Like the globalizing corporations, which are increasingly striving to be among the three world market leaders in their core areas, Singapore Inc. seeks to achieve such a top position in the world in all state and state-mediated fields of activity. However, people are becoming increasingly aware that the state should and can only design the framework conditions efficiently. The economic dynamism must then be developed by the commercial enterprises.
The starting point must be to strengthen the competitiveness of companies that are creative, risk-taking and must be managed in a risk-conscious manner, who use modern technologies and adapt to their developmentwinding participate - and whose free market is the whole world if possible. Singapore is therefore also an advocate of free world trade or at least regional or bilateral free trade - whatever is possible and assertive. The WTO has stagnated since Seattle. ASEAN is making slow progress with tariff cuts. In 1992 an ASEAN Free Trade Area (Afta) was agreed for 2008. By 2003 there should be an almost complete abolition of tariffs for 60% of the product lines for the old members of the community. It is rather uncertain whether the goal will be achieved. Singapore therefore started going it alone. In November 2000 - much to the displeasure of some ASEAN partners - it signed a bilateral free trade agreement with New Zealand. Negotiations in this direction have started with Australia, Canada, India, Japan, Mexico, Chile and the USA. Advances were made to the European Union, but it has not yet reacted. The aim is to make their own companies even more competitive by opening up and strengthening the market by means of further internationalization and deregulation.
So far the industrial sector has been fully globalsized, but large parts of the service and infrastructure sector Not. One is now looking to deregulate further sectors and at the same time their transnational penetrationsupply to enable and international exto stimulate pansion. In April 2000 liberathe telecommunications market was lized. The energy and insurance sectors are set to follow. The media, health, educational and The transport sector is under discussion. The banking and finance sectors are particularly important. Foreign banks are still subject to various restrictions here. These are to be "carefully" dismantled within five years in order to enable more competition. On the other hand, not only the government regards the domestic market as too narrow for the nine Singaporean banks. In the long term, she only sees room for two banks here. The largest (also state-controlled) institute, the Development Bank of Singapore (DBS), was merged with the Post Office Savings Bank. After several acquisitions in Thailand, the Philippines and Indonesia, it has now become the largest bank in Southeast Asia. In the meantime, two smaller banks have also merged, also with state participation. However, the willingness of the private banks - also controlled by owner families - to join forces does not seem to be very great. After all, all banks are now being forced by the government to be more transparent. In mid-2000, they were also given a period of three years to divest themselves of their holdings in other economic sectors - in particular real estate, hotel, consumer goods and electrical industries - so that they could concentrate on their core business.
A bundle of reforms is also being sought to strengthen the equity, bond and futures markets. Issuing and trading bonds has been a rather unattractive business that has been hampered by numerous regulations and has little liquidity. Foreign companies were now allowed, among other things, to issue bonds in S $. The state and public corporations as well as state-owned companies now regularly act as issuers and some of their placements are handled by private fund managers in order to strengthen them and bind them to Singapore. The stock and foreign exchange markets became the first fully integrated trading platform for Securities and derivatives in Asia as of December 1, 1999 combined. The Singapore Exchange (SGX) entered into numerous collaborations with other exchanges. The admission requirements for new issues have been eased and the transparency regulations tightened. A larger part of the money that was forcibly saved in the Central Provident Fund and only paid poor interest there was now allowed to be invested on the stock exchange. Other state-owned companies were partially privatized on the stock exchange - and each met with great investor interest. In contrast to the neighboring countries, after 1997 it was possible to bring numerous new companies to the stock exchange as well as to increase sales and improve liquidity.
However, it is not yet possible to fully privatize state-controlled companies penetratealthough their limits are increasingly discussed. They were particularly evident in risky investments in neighboring countries and China, as well as in takeover attempts by other companies. The state-controlled companies are considered to be properly and honestly run. However, the management is considered risk-averse, too little aggressive, not very creative. They are more efficient civil servants, less risk-taking and risk-conscious managers. In order to get around this problem, efforts were made after 1997 to recruit top foreign managers for the state-controlled companies, which was achieved in a number of cases, including for the two largest banks. There also seem to be bottlenecks in middle management, as shown in the preparation of takeovers ("due diligence").
Corresponding expertise and familiarity with the legal issues of the international financial and capital markets are also lacking in the 729 law firms with their 3,300 lawyers in the city-state. In 1996, the number of these was considered to be too large for the small country, so that the number of university graduates was reduced from 250 p.a. (1993 to 1996) to 185 (1996 to 1997) and 73 (1998). Compared to the good years during the real estate boom, the average income of lawyers was also halved (to S $ 10,000 in 1998). Still, mass does not make class. The mostly far too small law firms - around half are one-person businesses - cannot fulfill the growing tasks in modern commercial and corporate law. The government is therefore trying to promote the formation of large commercial law firms, also through limited opening to large foreign law firms that can enter into joint ventures and partnerships with Singaporean law firms.
The Asian crisis has shown elsewhere how economies with weak and improperly functioning bureaucracies and regulators can be punished. That was not the case in Singapore. Here, however, you can see that now latent problem of overregulation. The competition committee therefore recommended evaluating the legal requirements and regulations also from a cost perspective for the companies and periodically reviewing them for their relevance. The bureaucracy should be given more flexible discretion, and approval procedures should be made more transparent. Where possible, private sector self-regulation should be relied on. The Monetary Authority (MAS) is now talking of wanting to move from “regulation” to “supervision”.
One has been in Sin for a long timeGapur realizes that the city-state can only get to the top in the world and can stay there if he has skilled argrassroots workers, creative and innovative Staff in mid-level and at the top. The goal is therefore, as it has been formulated for several years, Singapure into a “hi tech, knowledge-based economy “to transform. The human resources in the small state as a basis for recruiting top people in science and research, technology and management are of course very limited. Efforts have therefore been made for a long time to recruit “foreign talent” (the local term). The need for them grows with the claim to further develop the city-state into a modern service and competence center for the region. The status and treatment of foreign experts differ significantly from that of unskilled and semi-skilled foreign workers. Efforts to make Singapore attractive to these immigrants have recently been intensified. Top people in some key areas are scarce around the world. One instrument is the awarding of scholarships to foreign students with the hope that they will stay in the country after graduation. Inbetween one has with the Infocomm Development Authority (IDA) an authority gecreate that specifically around the expert endficit care. This puts the annual growth in demand at 10 to 12% (or 10,000 people), of which only about half can be recruited in the country. In August 2000, she signed a contract with an Indian government agency to recruit 1,000 IT specialists per year for Singapore. There are currently around 80,000 “foreign talents” without citizenship and a significantly larger number now with citizenship in Singapore.
Of course, one does not limit oneself to the recruitment and immigration policy in order to deal with the staffing shortages but also tries to tap into one's own potential as comprehensively as possible. Accordingly, in the schools, universities and, as the only country in Asia (after Japan), in further training for workers and massive in Forinvested in research and development. In October 2000, it was decided again to increase the funds for research and development in a five-year plan by 75% compared to the previous period and to set up two further research facilities (for bio-medicine and natural and engineering sciences). All schools were equipped with computers (one device for two students). The kindergartens are to follow. From the fifth grade onwards, students should learn to set up a simple website. Up to a third of the lessons should be handled via the computer.
The efforts are impressive. So far, however, the actual results have not yet been very satisfactory, all in all. Students who have studied abroad have better career prospects because they appear to perform better. Practically the entire incumbent cabinet studied abroad. The only problem is that many do not return from studying abroad, while other academics leave the city-state. So Singapore also suffers from a brain drain of around 2,000 highly qualified people per year. According to official estimates, a total of 150,000 Singaporeans now live abroad. Many of them studied with government scholarships and an obligation to work in the public sector in the city-state for 3 to 5 years after graduation.
There will be various reasons for professionals to leave the country. The political climate in the city-state, the political disciplinening and administrative control play a role for quite a fewlen. It speaks for the responsible political elite that they have not escaped this fact. In the meantime, it has also been recognized that the school and university system conveys discipline and accessible knowledge - with very good success, as demonstrated by international mathematics and physics tests. However, creativity and social skills, which are particularly important in a “knowledge economy”, are left behind.
We are now in the process of redesigning the training system. The query knowledge is supplemented by the expansion of the educational canon, by practicing the ability to cooperate and other social skills, by promoting the understanding and thinking skills of the trainees. Studying abroad - as a pull factor for emigration - is trying to reduce the importance of studying abroad by motivating prestigious universities to build a satellite campus in the city-state. By 2008 there should be a total of ten. At the age of six you are negotiating or they have already started their business: They are sonorous names: John Hopkins University, Massachusetts Institute of Technology, Georgia Institute of Technology, University of Chicago, Wharton School (all from the USA) and INSEAD (France ). The universities don't come for God's wages, they charge hefty tuition fees, which are probably not a problem in Singapore.
In the past, attempts were made to deter those “emigrants” who did not meet their scholarship obligations through defamation measures (name and photo on the front page of the Straits Times). Meanwhile looking you get them by promoting clubs for Singapureaner abroad as well as through ideological soul massage to bind the homeland. A larger open is also aiming in this directionwillingness and willingness to listen to the citizensren. Even in the media get criti-cal contributions to the debate take up a larger space. Based on the model in Hyde Park in London, a public "Speakers Corner" set up - remarkably only after a long period of hesitation. This effortThese are reminiscent of the liberalization negotiationsseek at the beginning of the term of the presentprime minister who not a realinitiated democratization. They show how difficult it is for technocratic politielite falls, really freedom and independencedependency of the citizens and the relatedbound chaos potential as necessary In frontexposure for creative and innovative leisto accept actions in all areas. However, one should not overlook the fact that the pluralist, democratically organized states in the region hardly provide the technocrats in Singapore with positive arguments to reconsider their position. In Thailand, in January 2001, a super-rich entrepreneur, who had earned a good part of his billion-dollar fortune through monopoly licenses, won the parliamentary elections with priceless populist promises in a landslide victory. The fact that he had recently been found guilty by the anti-corruption authority had apparently not deterred any voter - commented the stunned architect of modern Singapore, Lee Kuan Yew.
© Friedrich Ebert Foundation | technical support | net edition fes-library | October 2001
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