Singapore – a Calm Oasis amid Japan’s Tragic Crisis

Posted: March 21st, 2011 | Author: Nick Hood | Filed under: All, Travellers's Tales | No Comments »

Few business trips can have been quite as surreal as the past few days in Singapore, not so far away from the unfolding and ever-worsening events in Japan. Save for CNN and BBC World’s rolling coverage and some intense print media material in The Straits Times, it seemed almost as though the drama might be happening on another planet.

Not once was it mentioned in conversation by any Singaporean, or indeed any other Asian attending a global insolvency conference there. Not until the last evening, late into the night in the Shangri-La’s 24th floor Blu Bar, was the subject mentioned – and then by a US lawyer quietly explaining the realities that had caused his firm to send home their staff in Tokyo and question whether their office would ever re-open.

The explanation was no doubt the ongoing disbelief at the power of nature to make an arrogant human race look quite so puny, magnified by the stoicism for which so much of Asia Pacific is rightly famous. But the silence on the topic was unsettling.

Maybe it also reflected a determination to hold on to the pride in Singapore’s extraordinary growth following a very temporary blip in the global financial crisis. Even China might marvel at an economy capable of achieving an annualised rise of 35% in GDP in a single quarter last year. Overall growth for 2010 was 14.5% and is expected to continue at a remarkably healthy rate of up to 6% in 2011.

Confidence is also reflected in government policy, which has encouraged a rise in the population from 3m in 1990 to the current figure of 5m. A look across to the astonishing Marina Bay Sands casino and hotel resort from the terrace of the Fullerton Hotel reveals a three tower marvel topped off by a spaceship-like roof structure with night time laser light shows and a one hectare mini-forest of trees perched precariously 200m above sea level. Clearly the previous caution about gambling and excessive tourism is long gone.

The boom is not just a reflection of the rapid recovery in activity in the crowded harbour, nor the burgeoning pharmaceutical industry. Singapore is benefitting from the success of China and India, for which it acts as a key trading, shipping and financial conduit.

The real estate sector in particular has done exceptionally well from the relaxation on India’s exchange control rules, which now permit significant amounts of capital to be taken out, much of which may be fuelling a price bubble. But a warning sign can be seen in a sudden rise of 50% in the number of unsold residential housing units in the four months since September 2010.

Another indicator of success is the extraordinary escalation in the price of vehicle permits. It now costs over SG$60,000 (some £30,000) to licence a car for a fixed period of ten years, over double the level of only a little while ago and a figure which exceeds the value of many of the vehicles themselves.

Restaurants are busy, tables hard to book and confidence is high among bankers, professionals and entrepreneurs alike. Whatever doubts there may once have been about the relevance of Singapore as Asia’s superpowers began to emerge and flex their muscles seems to been laid to rest.

Singapore has regained its swan-like demeanour, all calm and inscrutability on the surface but much manic commercial paddling going on unseen beneath the commercial and financial waters. But what problems may lie ahead, courtesy of natural events in Japan?