By John Burton in Singapore
Published: January 24 2007 00:10
As Singapore has prospered as a trading centre in a region with its fair share of economic laggards, the city-state has often stood accused of economic imperialism. Especially as Temasek, its investment arm, has acquired a growing list of assets in often strategic industries in neighbouring countries.
In what Singapore’s officials say are purely commercial investments by Temasek, local opponents have long seen “dollar diplomacy” at work and a political as well as an economic agenda.
But mounting efforts by Thailand’s government to reduce Temasek’s stake in Shin Corp, the telecoms group, have raised the regional political pressure on Singapore and Temasek to a new level. The stake was bought last year from the family of Thaksin Shinawatra, the prime minister ousted by Thailand’s current military rulers.
Together with other emerging issues – such as a threatened anti-competition probe into telecoms ventures in Indonesia – Temasek’s problems in Thailand have raised questions over whether it might be forced to focus its investments outside the region to where it provokes less controversy.
Chua Hak Bin, a regional economist at Citigroup in Singapore, said: “Recent events show that Singapore has to be cautious in investing abroad and not go into areas that are politically sensitive.”
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