Singapore - Island sits in an ocean of economic turbulence

Recommended by an anonymous emailer who I would like to thank for drawing my attention to the article. It is from the Sydney Morning Herald on the April 30, 2007.

Eric Ellis looks for explanations for Singapore's booming property market.

SINGAPORE'S property market is roaring. And why I know that is because the lease on our apartment will soon expire and our landlady wants 70 per cent more rent than she did in 2004.

No matter that the place leaks like a Canberra cabinet and that its 1970s-wired electricity trips at least once a week: these are details too far for our poco-curante proprietrix. But she has noticed that a private banker from Tokyo has signed, sight unseen, for a same-sized unimproved flat downstairs at 150 per cent more than the vacating lessee paid, and she reckons we are getting a bargain for $6000 a month.

It's all very puzzling as there's no textbook rationale to the sudden real estate boom here. The economy's growing at an unremarkable-for-Asia 6 per cent, much the same as it has for years, save the difficult "Asian Contagion" period of the late 1990s. There's no more government pump-priming than usual, none of the official withholding of land to get prices artificially moving that's much loved in Singapore's rival for city-state hothouse, Hong Kong. And though wealthy enough, with just 4.5 million people Singapore is still 2.4 billion consumers short of being "Chindia", Asia's neologism du jour.

From Sotheby's to shares, Singapore has no shortage of places to park cash. But new luxury apartment blocks are sprouting among the frangipani, touting all manner of metropolitan arcadia - infinity pools, gyms, private clubs. They sport funky names such as Trillium and Botanika, fashioned on hoardings in designer fonts usually seen in Wallpaper magazine. My favourite promises that the elysian towers rising behind it will be "Home to 46 of the Most Luminous Families" - which will presumably take care of electricity bills, also on the rise.

The reasons why it's suddenly salad days for Singapore developers seem to reside in neighbouring Indonesia, a country rated by the graft watchdog Transparency International at 130th of the 163 nations it tracks in its annual corruption survey. TI's first place, ie, the world's least corrupt place, is occupied by Finland, Iceland and New Zealand. Australia ranks joint ninth with The Netherlands.

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Indonesian maid survives three-storey fall from Singapore flat

I am amazed that this is still going on. Year after year people are still sending maids out on to window ledges to clean their windows.

Mar 17, 2007, 14:22 GMT

Singapore - An Indonesian maid was in stable condition on Saturday after a three-storey fall from her employer's Singapore flat when she slipped while cleaning windows, police said.

Nia Wulandari, in her early 20s, fell from the window ledge on Friday.

Two maids plunged to their deaths in October and November last year. There have been more than 100 workplace maid deaths in the city-state over the last seven years.

Nia, who was found by a neighbour lying motionless, was taken to the National University Hospital. Her arms and legs were in casts.

The maid told The Straits Times that she frequently climbed onto the ledge to do the cleaning.

More must be done to educate both maids and employers that it is not worth risking someone's life for the sake of clean windows, said Jolovan Wham, executive director of a charity that shelters abused maids.

Laws were beefed up last October against employers who put their maid's lives in danger.

An employer who knowingly allows a maid to endanger herself, or forces a maid into a dangerous situation, can be jailed up to three months and fined.

The employer is also to be permanently barred from hiring foreign maids.

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Deutsche Presse-Agentur

Singapore's Moral Obligation

The following letter published in The Jakarta Post makes the allegation that Singapore is harbouring 500 Indonesians who have been charged with corporate crimes and 30 Billion US dollars worth of cash. Can one of the Peoples Action Party lurkers confirm or deny this allegation? We would of course prefer precise numbers rather than mere rhetoric.

I read with interest the article titled Indonesia: Big nation led by small minds (The Jakarta Post, Feb. 17).

It seems to have escaped the writer that Singapore has struck hard bargains throughout its history and likes to set the agenda. It was to its dismay that it found Jakarta no longer dancing to its tune.

Remember that it was Singapore who tried to tie the security/defense pacts with that of the extradition treaty, and they tried to deal with these as a package. This was their idea and Indonesia was obliged to comply with this set-up.

The action taken by Indonesia is very courageous because of the fact that Singapore has been dragging its feet on the extradition treaty as well as other outstanding issues.

It is an apparent fact that Singapore harbors over 500 Indonesian citizens who are charged with corporate crimes in their own country. The total wealth taken out of Indonesia and deposited in Singapore banks totals US$30 billion. Here we see the real reason for Singapore's lack of interest in making the extradition treaty work.

I'm sure Singapore can afford to buy sand from other places at a premium price with the $30 billion it is "safekeeping" for the Indonesian criminals that are living the high-life in Singapore.

Indonesia must not fall for the stick and carrot game that Singapore likes to play. Indonesia must also not shy away from its right to get these criminals back home to stand trial and to recuperate the lost wealth that left with them.

Singapore needs to be made aware of its moral obligations and should not be surprised when it is at the receiving end of someone else's grievances.

ZAKI HAMMAAD
London

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Singapore

A relationship built on sand

Below are extracts from an article by Bill Guerin who has managed to take a step back from Singapore's and in particluar Temasek's ongoing financial dealings with its neighbours. The Peoples Action Party has often stated that no opposition party would be capable of running the economy and financial investments as well as they have been doing for the last thirty plus years. The rise to economic dominance in South East Asia was a majestic climb but now that the Peoples Action Party has reached a plateux they seem to be incapable of investing in their neighbours without causing a political stink. So just how great a job have the PAP been doing over the last few years.

JAKARTA - Singapore's aggressive regional investment strategy has already taken bilateral relations with Thailand to an all-time low, but a rising tide of economic nationalism and unresolved extradition issues with neighboring Indonesia potentially represents a more crucial test for the island state's economic diplomacy. [...]

The Peoples Action Party will of course point the finger of blame not at their own party but that of the allegedly independent Temasek in order to defuse allegations that they are somehow mismanaging investments. This seems to be the current line of response in the Thaksin Shin Corp deal, but with the land-reclamation programme and its need for sand imported from Indonesia, such a defence is redundant. I am in no way buying the party line that Temasek is a separate 'business entity', but in this particular case the Peoples Action Party have less of a 'deniabililty' position to fall back on. The land reclamation project is an initiative undertaken and promoted by the Singaporean government. The Indonesian government has banned such sand exports to Singapore as leverage in negotiations over a planned extradition treaty.

Controversy over Singapore's land-reclamation projects, which entail huge imports of foreign sand and soil, represent the latest spat in a historically prickly bilateral relationship - one that is coming under increasing strain that threatens Singapore's Indonesia-based investments. [...]

The two sides have been negotiating the issue [extradition treaty]on and off for more than three decades, although the issue became particularly heated after the 1997-98 Asian financial crisis, when a number of ethnic-Chinese Indonesian businessmen absconded with huge amounts of cash they allegedly illegally deposited in Singaporean bank accounts.

Singapore's drive to be the Switzerland of South East Asia is built on the very premise that the accounts are easy to set up and the money placed in them is done so on a 'no-questions-asked' basis. Of course it attracts money gained through corruption or other questionable means. That's the whole point of running a 'Switzerland' style banking system. The problem for Singapore and the People's Action Party is that in doing it with money in South East Asia which has such a wide and visible lack of social equality it is 'theft'. According to Andy Xie "Actually, Singapore’s success came mainly from being the money laundering center for corrupt Indonesian businessmen and government officials." So until the extradition treaty is drawn up and it includes provisions to include economic crime the situation and antagonism between the two nations will remain.

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Singapore

Indonesia bans sand to Singapore

George Yeo is apparently surprised that this action might be 'politically' motivated. Imagine politics interfering in a business deal - my God. Next the foreign media will be telling George that Temasek is actually being run by the Singapore government and that it has upset the Thai authorities and led to a military coup.

George also argues that these rather drawn out negotiations have not been easy. It can be rather difficult to string a conversation out while behind his back your accomplice is robbing their home.

As the article by Michael Backman asserts

The authorities have found out and you're facing arrest. You need somewhere to go where authorities can't touch you. So where do you go? The answer is Singapore. Why? Because it is a half-hour flight from Jakarta, or 45 minutes by ferry from the Indonesian island of Batam, and, most importantly, it does not have an extradition treaty with Indonesia.

It is largely ethnically Chinese, just like many of Indonesia's white-collar criminals, if only because Indonesians of Chinese ancestry dominate that country's business sector.

Singapore finally agreed to negotiate an extradition treaty last year after years of Indonesia begging for one. The process has been ridiculously drawn out. At least six rounds of talks have been held. Indonesia is angry and feels that Singapore is being obstructionist. But why should Singapore be slow? Probably because it is a haven for Indonesian crooks on the run, and they bring their money with them. Billions of dollars in corruptly obtained funds have flowed into Singapore's property market and its banks.

So we all know how 'difficult' such negotiations can be. But for anyone to claim that any descision amongst these politicians, is some how a 'political matter' other than a mere business arrangement, well that is just down right unreasonable.

From the BBC

Singapore is to fix the price of sand used in the construction industry after Indonesia banned all exports to its city-state neighbour.

Officially Indonesia has said the ban is due to environmental concerns, but some believe it is politically driven.

A Singapore newspaper reported that it had been told that the ban was due to a difference over an extradition treaty.

Singapore is one of the largest importers of Indonesian sand, which is used to make concrete.

'Counter-productive'

Singapore Foreign Minister George Yeo has said that, if true, Indonesia's suggestion that the ban was in protest over delays to an extradition treaty, was "unfortunate and counter-productive".

The two countries are separated by the Strait of Singapore

The comments were reported to have been made by an Indonesian official.

Mr Yeo added that negotiating the first extradition treaty between the two nations was not easy.

Indonesia has been pushing Singapore for an extradition treaty which Jakarta says is vital in its fight against corruption.

The Indonesian government alleges that many suspects wanted in Indonesia on corruption charges have simple fled to Singapore.

Jakarta has previously banned the export of sea sand to Singapore, which is used in land reclamation.

Singapore is now fixing the price of sand to curb any inflationary pressures as importers have to switch to alternative sources.

Singapore